In 2019, the tax auditing bureaus at all levels made all-out efforts in investigating and penalizing violations of tax laws and regulations, continued to deepen reforms of tax auditing and improve their work efficiency and efficacy.

Improving Tax Auditing System and Mechanism

The STA further deepened and improved the tax auditing reform. It promulgated 12 documents, including the Notice on Regulating the Operation of Audit Institutions and the Suggestions on Further Improving the Tax Auditing Work, and formulated regulations and measures for tax auditing, collaborative investigation of invoice, crack-down on tax frauds, fund management, major cases management, fund investigation and control, report management, dual investigation of cases, and "blacklist" objection handling, etc. to consolidate and improve the results of the tax auditing reform and promote the effective and orderly implementation of audit work.

Enforcing Two-Year Special Program of Combating False Issuance of Invoices and Export Tax Refund Frauds 

Cooperating with the Ministry of Public Security, the General Administration of Customs, and the People's Bank of China, the STA launched the two-year special action of fighting VAT refund frauds through false issuance of invoices, aiming to severely attack false invoice issuance of the "fake entities" without business substance and "fake export" without actual export transactions. In 2019, the STA continued to coordinate tax auditing force at all levels across the country, maintained a high-handed posture in fighting VAT refund frauds through false issuance, and investigated and penalized a number of major cases, which has effectively standardizing the economic order and improving the tax business environment.

Supervision Random Selection and Results Publication

In 2019, the STA put equal emphasis on supervision strengthening and law enforcement optimization, and continued to improve supervision through "Two Randoms" selection and timely publicity (the random selection of both inspectors and inspection targets, and the prompt release of results to the public). The STA focused on key industries and key tax sources and increased the number of "Two Randoms" selection tasks. For new format enterprises, inclusive and prudent supervision was carried out and no audit was implemented when there was no risk. The STA also promoted a combination of "Two Randoms" selection supervision and risk analysis, which "kept the sword sharp" for law breaker and did nothing to those who obey the law. The Tax Auditing "Two Randoms" Platform was continuously optimized, realizing the overall planning of random inspection tasks and the tracking and monitoring of the whole process. With the cooperation of multiple departments, the List of Items Jointly Spot Checked by Departments in the Field of Market Supervision was formulated, which incorporated the "Two Randoms" selection and timely publicity of the tax authority into the joint market supervision.

Promoting IT-based Auditing

The STA set up a framework of the IT-Based Tax Auditing Command Management System, built a new Auditing Management Platform and an Auditing Video System, and upgraded big data application methods. It comprehensively promoted the standardization of four main audit enforcement sites, including the auditing inquiry room, the case files investigation room, the report reception room, and the command and consultation room.

In-Depth Implementation of "Blacklist" and Joint Punishment System

Since the first blacklisted cases were disclosed in October 2014, a total of 40,799 blacklisted cases have been published and 547.4 thousand entities were referred to relevant government agencies by tax authorities at all levels for joint punishment. The joint punishment system has played its part in financing credit rating, government purchase, land supply, bond issuance and so on. During 2019, tax authorities of all levels published 24,157 blacklisted cases and referred 271.8 thousand entities to relevant authorities for joint punishment. Of all the blacklisted businesses published across the country, 1719 have voluntarily paid taxes, interests and penalties.