Chinese tax authority denies targeting companies over old taxes

China's State Taxation Administration said on Jun 18 that it has not launched any national, industry-specific, or large-scale tax inspection campaign, nor does it plan to audit company tax evasion that could be traced back 20 or 30 years.

The remarks were in response to some market rumors that some local governments might be looking to punish companies for decades-old overdue tax or tax misconduct behaviors amid mounting fiscal stress.

The tax authority said as for some recent reports on tax inspections and supplementary taxes, some businesses were reminded to pay overdue taxes from previous years according to procedures, while others were informed of potential risks related to tax policies.

"These cases are routine, lawful, and regulatory duties performed by the tax authority," it said.

The tax authority emphasized that in China, the relationship between tax authorities and businesses is "interdependent", and only when the businesses grow well can the nation's tax revenues be healthy.

However, it added that sustained efforts will be made to crack down on illegal activities such as tax evasion and fraud, so as to offer a fair and competitive tax environment for companies across the country.

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