The chairman of one of the nation’s largest tea shop chains yesterday said that he was the victim of the company’s cup supplier after he was indicted on fraud and tax evasion charges.
Kaohsiung prosecutors on Friday indicted Ching Shin Fu Chuan (清心福全公司) chairman Chao Chi-hung (趙啟宏), along with five other executives from the Tainan-based company and Kaohsiung-based Telung Polylon Industry (大隆保利龍公司), which supplies the chain’s cups.
Prosecutors said that Chao and others allegedly colluded with Telung Polylon’s owner, a man surnamed Chuang (莊), to forge receipts and company records over the past four years to avoid paying NT$355.55 million (US$12.3 million) in container recycling, clearance and disposal fees, as mandated by the Environmental Protection Administration (EPA) under the Waste Disposal Act (廢棄物清理法).
Workers and independent franchise owners of Ching Shin Fu Chuan, which has 946 tea shops under its banner in Taiwan, also allegedly fabricated receipts and records to avoid paying NT$47.64 million in taxes during the same period, in breach of the Tax Collection Act (稅捐稽徵法), prosecutors said.
Instead of using cups made from pulp and paper materials, Ching Shin Fu Chuan used cups made from nonbiodegradable expanded polystyrene (EPS) and polypropylene, as these materials have better insulation properties, prosecutors said.
However, these materials require extra handling in disposal, and the EPA imposes higher fees on companies for their use: NT$37.29 per kilogram at the time for EPS — which has since increased to NT$69.83 per kilogram — and NT$7 per kilogram for polypropylene in 2018.
Prosecutors said that Chao allegedly colluded with Chuang to forge accounting records to reduce the EPA-imposed fees and report lower earnings to reduce taxes.
Starting in 2015, the companies had reported to the EPA less than 20 percent of the total EPS and polypropylene cups supplied by Telung Polylon, prosecutors said.
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