SEF warns of heightened tax scrutiny in China

Taipei, July 12 (CNA) Taiwanese businesses in China should be extra vigilant due to China's intensified tax scrutiny amid the deteriorating finances of local governments there, the Straits Exchange Foundation (SEF) warned Friday.

Over 20 Chinese provinces and cities have set up "police-tax joint operation centers" to combat tax evasion and underreporting, said SEF Secretary-General Luo Wen-jia (羅文嘉) at a press briefing.

Luo explained that there have been reports of Chinese local governments' suffering serious financial woes including the shortages of income and rising debt.

To fix the problems the affected provinces and cities "are finding every possible way to audit taxes," he said.

The local governments have incorporated police, public security and tax personnel, used big data analysis, and collected data from all kinds of information platforms to "combat every possible tax evasion offense through precision strikes," Luo said.

Any tax problems discovered over the past 30 years could lead to substantial fines, criminal or administrative liabilities, he warned.

"Public information indicates that many listed companies in mainland China have been slapped with substantial fines under the program," Luo said without elaborating.

Although no such cases involving Taiwanese businesses have been reported so far, Luo said they are welcome to consult SEF financial experts should any related situations arise.

The SEF is a semiofficial organization tasked by Taiwan's government with handling technical matters involving China.