China nabs 80 for tax fraud


The tax crackdown comes as China gears up for global competition

Staff and wires

BEIJING, China -- China has seized 80 people suspected of tax frauds costing the government an estimated 3.3 billion yuan ($399 million).

Police detained the suspects as part of a national campaign that began last August to crack down on the illegal printing and selling of tax invoices, the official China Daily said on Wednesday.

As part of their probe, authorities smashed 10 criminal networks along with 29 hideouts and seized around 170,000 false tax receipts.

The suspects had caused losses estimated at 3.3 billion yuan, the paper quoted a senior official of China's Economic Crime Investigation Department as saying.

The crackdown comes as China seeks to cut the link between printing and selling tax invoices, and making, marketing fake and shoddy goods, fraud, corruption and smuggling.

China has a reputation for being a breeding ground for fraud. Industry groups estimate more than 90 percent of computer software in China is pirated, with vendors hawking pirated DVD's for as little as $1.00.

China has come under pressure to tighten up its act in the aftermath of joining the World Trade Organization, and is already probing the Bank of China, the country's main foreign currency bank, for fraud in some of its operations.

'Danger is getting bigger'

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Tax fraud is spreading in China and it will take a long time to rid the vast country of the problem, the paper quoted another official from the department as saying.

"During our investigation, the crimes expanded from coastal areas to central and western China and the danger is getting bigger," the official said.

In January 2000, Shanghai uncovered its biggest tax-related criminal case, involving 1.2 billion yuan ($145 million) in fake value-added tax (VAT) invoices, according to the Liberation Daily.

Police arrested at least 78 people for involvement in that case and jailed 17 of them for up to 10 years.

In July 1999, police in southern China arrested 27 people on charges of printing and selling fake invoices with a face value of 13 billion yuan ($1.57 billion), the Legal Daily reported.