Tax officials and policemen have uncovered a tax fraud case involving 2.8 billion yuan (US$340 million) and 211 firms across 11 provinces, the State Administration of Taxation said Thursday.

An official with the administration said that 75 "major suspects" have been detained by the police during the operation, which was launched a year ago.

In December 2003, three companies were discovered to be inflating their value-added tax invoices to get increased tax rebates, said the official, who declined to be named.

The three firms include a garment firm in Xining, capital of northwestern China's Qinghai Province, Shenzhen-based Ordos Industrial Co, and Jinhua Export and Import Co in east China's Zhejiang Province.

An investigation revealed that the false invoices were worth 2.84 billion yuan (US$343 million), involving 430 million yuan (US$52 million) in taxes, said the official.

"Tax and police officials have obtained 41,167 overstated invoices and tax payment documents."

The case, still under investigation by tax and police officials, is the latest since China launched a nationwide crackdown on tax fraud.

Tax administrations at various levels across China paid a total of 420 billion yuan (US$51 billion) in tax rebates for the country's exporters last year, up 106 percent year-on-year, or an increase of 216 billion yuan (US$26 billion), said the director general.

The figure included 200 billion yuan (US$24 billion) in delayed tax rebates, which the central governments owed to exporters before 2003.

Officials said the payment of the tax rebates have increased the cash liquidity of the exporters.

Xie Xuren, director general of the State Administration of Taxation, said Tuesday that China's total tax revenue hit 2.57 trillion yuan (US$313 billion) in 2004, up 25.7 percent on a yearly basis.

The figure, which excludes customs tariffs and agricultural taxes, represents a record high for the country's tax revenue. China's tax revenue increased by 525.6 billion yuan (US$64 billion) last year, also a record high.

The administration owed the rapid increase to China's fast economic growth, robust foreign trade expansion, increased returns of Chinese firms and improved efforts by tax bureaus in collecting taxes and cracking down on tax evasion.

(Xinhua News Agency January 14, 2005)