Chinese authorities are demanding wealthy individuals and companies double-check their taxes for unpaid liabilities in a move that threatens to further dent investor confidence in the world’s second-largest economy. Tax officials in recent months have asked wealthy individuals and companies to carry out “self-inspections” of their tax payments and cough up any deficiencies, as local governments hunt for revenue to refill coffers depleted by a property slump.
“Local governments obviously don’t have money,” said one executive of a medium-sized manufacturing company in Suzhou, one of China’s industrial heartlands near Shanghai. He added that they were frequently hitting companies in his area with heavy fines. “China’s fiscal deficits have reached a tipping point,” said Gary Ng, a senior economist at Natixis. “There is more urgency to find alternative revenue sources . . .