Evading Taxes of 23.22 Million?! Guming Milk Tea Fined Over 11.61 Million Yuan

Guming Milk Tea fined over 11 million yuan for tax evasion

"Guming, how could you do this? Do you deserve all the money I've spent on you?" "Guming is so expensive, has few promotions, and now tax evasion too. It's hard to understand." Today's top trending topic on Weibo left many bubble tea fans exclaiming, "Oh no! My trust has been shattered!"

On March 28, according to media reports, Zhejiang Guming Technology Co., Ltd., the affiliated company of Guming Milk Tea, was fined over 11.61 million yuan by the Taizhou Tax Bureau. Administrative penalty information viewed through the National Enterprise Credit Information Publicity System shows that the company failed to make tax declarations, failed to pay or underpaid taxes that should have been paid, and failed to include or underreported income in its accounting records.

In accordance with Article 63, Paragraph 1 of the PRC Tax Collection and Administration Law, the tax bureau imposed a fine of 50% of the underpaid value-added tax, corporate income tax and urban maintenance and construction tax, totaling 23.22 million yuan, amounting to 11,610,236.05 yuan. In addition, under Article 64, Paragraph 2, the company was fined 50% of the underpaid stamp tax of 6,360.30 yuan, amounting to 3,180.15 yuan, for a total fine of 11,613,416.2 yuan.

According to the company's official website, Guming was established in April 2010 and has grown over 12 years of steady development into one of the leading brands in the new-style tea beverage industry. Through franchising, by 2021 Guming Milk Tea had expanded to more than 6,000 stores across China, covering 18 provinces and 140 cities, while also expanding internationally with a store in Tuscany, Italy. As the number of franchisees grew, however, various internal problems within the company emerged.

Previous franchisee protests

As early as 2020, Guming's own franchisees had publicly exposed that the company not only evaded taxes itself but instructed franchisees to do the same. From the protest materials, it is also apparent that Guming's chairman, Wang Yun'an, and his team, while instructing franchisees, resentfully said that "because of ignorance and selfishness, they are backward."

After listening to the lecture, the franchisee said they would protest by keeping their store closed for business. Upon learning of this franchisee's actions, Guming's headquarters attacked and threatened them, but the protesting franchisee did not compromise, stating they would take legal responsibility for their public statements.

Food safety issues

On February 22 this year, a Guming Milk Tea store was exposed for altering milk expiration dates, using yogurt that was four days past expiration, transferring expired tea into different containers for continued sale, cutting off the blackened portions of fresh mangoes for continued use, and having veteran staff teach new employees how to avoid supervision and inspection.

In response to these incidents, Guming Tea's official Weibo account did not issue a rectification statement. Instead, it commented in the comment section of the Weibo post that exposed the issues: "Thank you for your supervision. Guming has always attached great importance to food safety. We immediately closed this store for a thorough investigation and are actively cooperating with relevant departments to conduct comprehensive food safety inspections of all stores nationwide. We will strengthen technical means to increase the frequency of electronic inspections and unannounced in-store inspections. Guming headquarters and all store partners nationwide will work together to do their jobs well and implement store food safety measures properly." That comment, however, was not reposted to the official Weibo account.

Regarding the tax evasion exposure, Guming again chose to remain silent, responding neither on its official Weibo nor on its website. Media also contacted Guming's official customer service today, but the customer service provided no real response, stating only that "the company takes this incident very seriously and is actively and properly handling it." As for when Guming began evading taxes, no clear information is yet available to the public.

Brand reputation at risk

Before being exposed for food safety and tax evasion issues, Guming Tea had always held a slight price advantage over Heytea thanks to its own fruit bases and complete supply chain distribution, earning it the nickname "affordable version of Heytea." At the same time, Guming Tea's distribution was extremely widespread, with stores visible from major cities to small towns, which helped it maintain a very good reputation.

With the exposure of the tax evasion incident, however, Guming's brand reputation and credibility have likely reached their end. Such behavior not only reduces national fiscal revenue but also affects the welfare benefits that citizens enjoy in public services.

"Paying taxes according to law is the duty of every citizen."

Image source: Internet, Weibo, video screenshots

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