Chinese auditors have discovered 734.9 million yuan (88.9 million US dollars) of unpaid taxes in various cases of law-breaking by local tax offices and customs tariff collectors in 2002, China's top auditor said Wednesday.
Li Jinhua, auditor-general of the National Audit Office, said in a report to a session of the Standing Committee of the National People's Congress (NPC) that the violations reduced central government fiscal revenue by 263.8 million yuan in 2002.
Through auditing of the operation of local tax offices in eight provinces last year, government auditors found some of the tax offices gave tax incentives that were not allowed by tax regulations.
Li said some local governments went beyond their authorities to relax tax rules to lure investment.
He said a regional government offered illegal tax rebates to investors or intermediate agents as a way to attract enterprises from outside the region to relocate their headquarters there.
During 2000-2002, enterprises moving into the region paid a total of 626 million yuan in taxes to regional coffers, to the loss of central government tax revenue.
The case has drawn the attention of central government and was dealt with by the Ministry of Finance and the State Administration of Taxation, Li said.
Official statistics showed that over the past five years, the National Audit Office helped discover and collect 2.6 billion yuan of defaulted payments to the central government and retrieved more than 2.4 billion yuan of government funds that were embezzled or misused.