Rights Defense Network: Analysis of New Policies and Regulations: The State Taxation Administration Issues the National Tax Administrative Penalty Discretionary Standards (2026 Edition)—Unified Discretion Cannot Conceal the Logic of Replacing Administration with Punishment; Tax Enforcement Must Return to a Human Rights-Centered Approach

Special Commentator: Zhang Haoran

The State Taxation Administration issued Announcement No. 20 of 2026, introducing the National Tax Administrative Penalty Discretionary Standards (2026 Edition). The announcement was signed on September 28, 2026, and made public that day on the State Taxation Administration’s official website. Xinhua News Agency published a report on it on October 6, and the document officially takes effect on November 1. These discretionary standards cover 66 tax administrative penalty matters in 9 major categories, and are accompanied by a list of 8 matters eligible for “no penalty for minor violations” in tax administration. They uniformly divide penalties into 5 levels of discretion: “minor, relatively minor, ordinary, relatively serious, and serious,” and specify the applicable conditions and penalty standards for each type of violation. Where tax administrative penalty discretionary standards previously implemented in localities are inconsistent with this announcement, this announcement shall prevail. (For details, see: https://fgk.chinatax.gov.cn/zcfgk/c100012/c5252754/content.html)

Analysis: Unified Discretion Cannot Conceal the Logic of Replacing Administration with Punishment Tax Enforcement Must Return to a Human Rights-Centered Approach

The National Tax Administrative Penalty Discretionary Standards (2026 Edition), issued by the State Taxation Administration, detail 66 penalty matters in 9 major categories in the name of unifying enforcement standards, and include a supplementary list of 8 matters eligible for “no penalty for minor violations.” This may appear to be progress in regulating tax enforcement, but viewed from the perspective of human rights protection, these standards do not escape the traditional governance logic of “replacing administration with punishment and using punishment to promote administration.” Instead, they may standardize and normalize penalties, further squeezing the basic rights of market entities amid the dual pressures of an economic downturn and local fiscal strain.

The right to equality is a cornerstone of human rights under the rule of law. These discretionary standards seek to bridge the gaps caused by inconsistent enforcement standards across localities, but avoid the core cause of unfair tax enforcement: unfair enforcement has never stemmed from a lack of penalty standards, but from the selective exercise of enforcement powers. For a long time, grassroots tax collection and administration have been closely tied to fine quotas and performance assessments. When confiscated revenue becomes an implicit channel for making up fiscal shortfalls, even the most detailed range of discretion can be manipulated at will—intentional tax evasion may be played down through “flexible enforcement,” while unintentional reporting errors and procedural oversights by small and micro businesses and individual businesses are often punished to the maximum extent. Uniform discretion in form cannot resolve selective enforcement in substance; it may instead make unfair enforcement more difficult to detect, ultimately eroding the basic human rights principle of equality before the law.

Property rights and the right to subsistence are central to economic and social rights. Existing academic research has confirmed a significant positive correlation between local fiscal pressure and increases in revenue from fines and confiscations. In the current economic downturn, when market entities are widely struggling, tax enforcement should adhere to the principle of restraint and prioritize protecting markets and employment. Yet the institutional design of these standards still treats punishment as the core means of tax administration: all 66 penalty matters cover the entire tax collection and administration process, while the so-called list of matters eligible for “no penalty for minor violations” contains only 8 items. A large number of minor violations without malicious intent and procedural defects remain within the scope of penalties. For small and medium-sized businesses and microbusinesses, whose cash flow is already fragile, a fine of several thousand or even tens of thousands of yuan may directly push them past the threshold of viability and cause employees to lose their jobs. This is by no means simply a matter of “the cost of violating the law”; it is a direct infringement on the right to subsistence and the right to development. When punishment is transformed from a corrective measure into a means of generating revenue, the public nature of taxation gives way to the pursuit of profit, ultimately harming the basic economic rights of ordinary people.

More alarming is that the governance model of “replacing administration with punishment” inherently erodes the value of due process. In grassroots tax enforcement, many penalties are imposed through summary procedures, and the parties’ rights to make statements and defenses and to present evidence often become mere formalities. Long-standing problems include “deciding the penalty first and making up the evidence later” and “emphasizing substance over procedure.” These unified discretionary standards detail only the range of penalties; they do not shore up the safeguards of procedural justice, nor do they establish “malicious intent” as a prerequisite for imposing penalties—that is, the power to punish may be exercised only when it has been proven that the party deliberately and maliciously violated the law. Without this human rights safeguard, even the most precise discretionary rules may become a “legal veneer” for the expansion of enforcement powers.

The modernization of tax governance has never meant that a more complex penalty system is a more advanced one. Genuine rule of law and human rights protection mean making “no punishment without malicious intent, no intrusion without necessity” the underlying logic of enforcement, shifting the focus of regulation from ex post punishment to ex ante services, and returning tax enforcement to its public purpose rather than allowing it to become a tool for replacing administration with punishment.