The Chinese Tax Department recently launched a retroactive tax collection on some businesses for the past 30 years, sparking social panic. At the same time, the appearance of “Tax Police Joint Operations Centers” in various parts of China last month has drawn attention, indicating a joint “law enforcement” effort by the Chinese public security and tax authorities. Netizens jokingly commented, “Financial matters rely on public security!” and some lawyers questioned, “Who exactly is the Operations Center fighting against?”
On June 18, well-known mainland lawyer Wang Cailiang posted on Weibo, expressing surprise at the establishment of several “Tax Police Joint Operations Centers” across different regions following the Tax Department’s retroactive investigation trend. It was discovered that as early as May 18, 2021, Yichun City in Jiangxi Province had already established the first demonstration base, and since then, such centers have been popping up everywhere.
The analysis pointed out the meaning of “operations:” in Chinese dictionaries, it refers to “hostility and mutual killing between military forces.” According to Baidu Encyclopedia, “operations are the fundamental tasks of military groups. Domestically, it is the highest or final form of class struggle; internationally, it is the use of force to resolve conflicts of national interests.”
Lawyer Wang Cailiang questioned, who exactly is being targeted in this “operation”? With “Tax Police Joint Operations,” meaning that the tax authorities and police form one side, while the other side consists of all taxpayers; by establishing the “Tax Police Joint Operations Center,” taxpayers are being treated as targets of the operation.
Records show that in Shenzhen, Changzhou, Jiangsu, Jiaxing in Zhejiang, and many other places, “Tax Police Joint Operations Centers” had already been established. On May 15, the Public Security Bureau and Tax Bureau of Changzhi City in Shanxi Province jointly held a ceremony to unveil the “Tax Police Joint Operations Center.” Officials stated that this was another strong measure to enhance coordination and effectiveness in fighting against tax crimes in Changzhi City.
Even Hu Xijin, a former official media editor known for supporting the Communist Party, expressed concerns on June 18 via Weibo. He mentioned that private businesses have faced difficulties in the past two years, leading to financial challenges in some regions, making tax checks more sensitive. He questioned the “joint operations” on tax issues, suggesting it creates a sense of tension and may undermine the confidence of private businesses in the current situation.
He stated, “It’s better not to hang up signs for ‘Tax Police Joint Operations Centers’ in various places, or at least not in new locations where they have not been put up yet.”
However, Hu Xijin’s post has been deleted at present.
Since mid-June, several Chinese publicly traded companies revealed that local governments have demanded them to pay taxes dating back to the 1990s. Weiwei Food was one such company, facing a 30-year retroactive tax investigation by the Chinese authorities regarding tax issues of its former subsidiary, Zhijiang Liquor, being asked to pay over 85 million yuan in back taxes. Additionally, Shunhao Shares, Beida Pharmaceutical, Zangge Mining, Hualin Securities, Lianjian Optoelectronics, among others, announced they would pay back taxes.
Bohui Shares announced a production halt on June 13, reportedly related to being asked to pay nearly 500 million yuan in back taxes by the tax authorities.
The tax collection events stirred online discussions. The National Tax Administration of the Communist Party of China stated on June 18 that there have been no nationwide or industry-wide tax inspection activities initiated, and they have no plans to investigate tax evasion by companies dating back twenty or thirty years.
However, many netizens on Weibo remain skeptical of the official statements:
“Ding Ding Wei Disciple”: “Don’t listen to what they say, watch what they do. Based on past experiences, the more they say they won’t do something, the more likely they will do it later, and with increased severity.”
“Watching their actions is more important than listening to their words.”
“I will definitely find a positive point: Interpretation of the National Tax Administration: This is a localized, multi-industry tax inspection by local tax authorities, not limited to 30 years.”
“Liang Shanbo and Zhu Yingtai”: “If you have not arranged it, shouldn’t you control the chaos?”
On June 16, Lai Jianping, a former Beijing lawyer and Chairman of the Canadian Alliance, stated in an interview with The Epoch Times that the Chinese authorities are currently facing extreme financial difficulties and severe economic contraction, with tax revenues becoming increasingly difficult to collect, leading to a shrinking tax base, making government operations challenging. Due to financial difficulties, the authorities have no choice but to significantly increase seizure of assets.