Spending in China boosted by prize-linked invoices

China's trial program offering incentives via issued invoices is beginning to boost consumption, with 230 million participants and total prize money of 1.85 billion yuan ($260 million) as of March 12, according to latest data from the State Taxation Administration (STA).

In an effort to promote consumer spending, three central departments launched a six-month pilot program at the beginning of the year in 50 cities across China, encouraging consumers to request invoices with a prize incentive.

However, authorities say that during the rollout of the program, some consumers and merchants have engaged in irregular practices to increase their chances of winning, including improperly issuing red-letter invoices after prize draws and repeatedly voiding invoices.

In response, the STA said on Wednesday that relevant departments will increase monitoring and enforcement in accordance with the Regulations on the Administration of Invoices and related rules.

Violations under scrutiny include issuing invoices for transactions that did not occur or did not match actual consumption, splitting or combining invoices in unreasonable ways to increase chances of winning, and improperly issuing red-letter invoices. The administration also highlighted cases where receipts are repeatedly canceled and reissued by altering buyer information.

Entities found to have violated the rules, including through improper participation or fraudulent prize claims, will be required to return awarded bonuses through technical means, the administration said.