Why Did the Bank of China Hold Back $335 Million in Taxes?

China’s National Audit Office says state-owned lender Bank of China underpaid about 2.4 billion yuan ($335 million) in taxes, according to a report, underscoring Beijing’s tighter scrutiny of tax compliance as slowing economic growth pressures government finances.

The audit did not specify whether the amount had been repaid or whether penalties would be imposed. Bank of China did not immediately comment.

The findings come as China’s banking sector grapples with slowing profit growth, weak loan demand and mounting pressure from the prolonged property downturn, which has eroded a key source of government revenue and increased concerns over asset quality.

China’s banking assets have expanded sharply over the past two decades, reaching more than 480 trillion yuan ($67 trillion) by 2025, according to the commentary published by Chinaworker.info, which argued that banks are under increasing financial strain as they set aside more capital to absorb potential bad loans.

The publication said the audit reflected growing fiscal pressure on the central government, which has stepped up enforcement against tax avoidance as revenue from land sales has slumped following the collapse of the property market.

Chinese banks have also been cutting branches, reducing staff and lowering executive compensation in recent years while tightening lending standards to businesses and households as they prioritize risk control over rapid balance-sheet expansion.

The commentary described the tax case as evidence of broader financial stress across China’s banking system rather than an isolated compliance issue. It also called for sweeping changes to China’s economic system, arguing that the country’s current model cannot resolve its structural challenges.

Bank of China is one of China’s four largest state-owned commercial banks by assets and plays a central role in financing the world’s second-largest economy.

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