Recently, in China, many regions have reactivated the “Taxation and Public Security Synthesis Operation Center,” with some areas starting to investigate tax payments from 30 years ago, causing widespread unease among the public. Experts believe that the Chinese Communist Party (CCP) is truly in dire need of funds, resorting to every possible means to collect money. The Chinese Taxation Bureau has justified these actions by claiming it is in line with international trends, but experts have condemned this as blatant lies.
In a recent development, the “Taxation and Public Security Synthesis Operation Center” was established by the tax authorities in Changzhi City, Shanxi Province. Prior to this, at least 20 provinces in China had set up similar “operation centers” at the local level.
On November 4, 2020, the Synthesis Operation Center was established within the Economic Crime Investigation Bureau of the Shenzhen Municipal Public Security Bureau, with the external announcement of enhanced joint investigations and crackdowns on tax-related offenses.
Subsequently, various locations like Shijiazhuang in Hebei Province (August 2020), Guiyang in Guizhou Province (November 2021), Baoding in Hebei Province (January 2023), and Yichun in Jiangxi Province (May 2021) have successively established related institutions.
While the Taxation and Public Security Synthesis Operation Center had gone unnoticed for years, it has recently become a hot topic due to reports of businesses being investigated for tax payments dating back 30 years. Whom is the “Operation Center” targeting?
Sheng Xue, a current affairs commentator and Chinese-Canadian writer, expressed to Epoch Times that the CCP’s actions are akin to a new round of “land grabbing,” going beyond mere exploitation of the people as now they are resorting to violent means. No one can escape these measures.
Former Beijing lawyer and chairman of the Canadian Friends of Hong Kong, Lee Kin Ping, also shared his views with Epoch Times, stating that the CCP’s establishment of the Operation Center highlights a form of compulsory, unconditional, one-sided command that forces individuals and companies to pay taxes or face enforcement by the police. This demonstrates the extreme financial difficulties the CCP is currently facing, as their sources of tax revenue have dried up.
With a significant withdrawal of foreign investments and a prolonged downturn in the real estate market in recent years, China’s economy is facing a crisis, leading to financial constraints at all levels of government.
According to data from the Chinese Ministry of Finance, from January to May, the national general public budget revenue was 96.912 billion yuan, a 2.8% year-on-year decrease; segmented into tax revenue and non-tax revenue, tax revenue was 80.462 billion yuan, down by 5.1%, while non-tax revenue increased by 10.3% to 16.45 billion yuan. The national government fund budget revenue saw a 10.8% decline to 16.638 billion yuan during the same period. In terms of expenditure, the national general public budget expenditure from January to May increased by 3.4% to 108.359 billion yuan, resulting in a deficit of 11.447 billion yuan, with the general public budget alone failing to cover the expenses.
Chinese-American economist Li Hengqing noted that the CCP authorities have no choice but to rely on police force to strengthen the enforcement capabilities of the taxation department. Hence the investigation of accounts spanning 30 years and the establishment of the Taxation and Public Security Synthesis Operation Center, where they aim to collectively target taxpayers, allowing them to investigate and seize money at will.
Li emphasized that the CCP’s measures do not benefit economic growth; instead, they push entrepreneurs to either flee overseas or adopt a passive stance.
On the evening of June 13, Weiwei Food and Beverage Co., Ltd., based in Xuzhou City, Zhejiang Province, received a tax notice from the Zhenjiang Tax Bureau in Hubei Province through its former controlling subsidiary, demanding a retroactive payment of 85.029 million yuan for consumption taxes unpaid between January 1, 1994, and October 31, 2009.
This case represents a typical example of the recent trend of the CCP authorities investigating tax payments from 30 years ago. Conversely, the Chinese Taxation Bureau denies conducting a 30-year retrospective investigation and defending the purpose of the “operation center.”
Quoting a statement from the official Weibo account of Sina Finance on June 18, the Taxation Bureau stated, “The tax department has not organized nationwide, industry-wide, or centralized tax inspections nor arranged for a 20 or 30-year retrospective investigation.”
Regarding the “Operation Center,” the Taxation Bureau claimed it is aimed at enhancing cooperation between tax and public security forces to crack down severely on tax evasion and related crimes. They insisted that joint operations between tax and public security are an international trend and cited the U.S. Internal Revenue Service (IRS) as an example, mentioning their armed forces, tax courts, and prisons.
In response, Li Hengqing denounced the Taxation Bureau’s claims as shameless. He pointed out that while the national body did not conduct nationwide or industrial-scale tax inspections, regional departments have started specific operations, some dating back 30 years. No normal country in the world adopts such measures; even in the U.S., tax audits are typically conducted for three years, not extended retroactively.
He further argued that the Taxation Bureau’s claim of a symbiotic relationship between taxpayers and the department is deceitful. Taxpayers and tax authorities are inherently in conflict, as the former seek lawful ways to minimize tax liabilities, whereas the latter aim to maximize collections. The notion of a mutual bond is thus untenable.
Li added, “The claim that the ‘operation center’ is not a new concept and is common overseas, with the example of the United States, is purely nonsense. The U.S. IRS does not have armed forces or prisons under its jurisdiction. Tax issues could involve civil disputes or criminal offenses. In civil disputes, the parties reach agreements on tax matters, while criminal cases are handled by courts with police enforcement. This is the standard procedure, contrary to the concept of joint tax-public security operations.”
Li concluded by highlighting that the CCP’s establishment of the “operation center” serves as intimidation towards taxpayers and entrepreneurs.
As the saying goes, “harsh policies are fiercer than a tiger.” China is currently under such circumstances, which are expected to escalate further. As government revenues decline and the economy falters, existing tax collection mechanisms prove insufficient, leading to various forms of exploitation. Paradoxically, such actions result in further economic downturn, where hefty fines may force companies into bankruptcy, an outcome witnessed by listed companies being pushed to the brink.
Li firmly stated, “There is no legal basis for a retrospective 30-year inquiry; the CCP is not a responsible government.”