ST. PETERSBURG -- With the tax police empowered to offer financial incentives to people who inform on firms that evade taxes, the St. Petersburg business community is jittery.


Discovery of the police incentives comes on the heels of a government crackdown on a leading joint venture, the Grand Hotel Europe, for $28 million in back taxes.


The text of the Law on the Federal Organs of the Tax Police gives officers the right "to pay the person providing information, regarding tax crimes or violations, a reward of up to 10 percent of the hidden sums of taxes."


Officers can also "invite citizens, who give their consent, to collaborate in the exposure of facts and methods used to perpetrate crimes and violations of tax legislation."


The head of a Western law firm in St. Petersburg, who asked not to be named, said the law, which has been operating since last June, "would appear to be designed to give those inside the organization the incentive to blow the whistle."


He described the tax police as an aggressive outfit, adding that legally they were required to apply for a court order before they could confiscate funds. He said there had been cases where monies had been taken directly from companies' bank accounts.


Reflecting their nervousness over the tax issue, many legal experts and company representatives declined to be identified when asked for comment because of uncertainty over the new tough stance of Russian authorities.


Georgy Poltavchenko, head of St. Petersburg's tax police, confirmed that financial incentives were being offered for information.


"There are many countries which have a similar provision in the law," he said.


However, officials in the U.S., British, German, Bulgarian and Hungarian consulates all said they had no knowledge of such provisions in their countries' tax laws.


In 1993, Poltavchenko said, his officers recovered more than 40 billion rubles ($24 million) and $20 million in the St. Petersburg area alone. He would not elaborate on how those funds were retrieved, but he said that Russian companies as well as joint ventures had been found breaking the law.


American Richard Torrence, a mayoral adviser for international affairs, said: "There is a great deal of nervousness in the business community, which has operated without constraints for a long time."


He said he believed that tax evasion was widespread in the city and that many companies had come to Russia because it was one place to avoid taxes.


"The whole game was not to be legal just to show a big profit," he said.


He welcomed the intervention of the tax police as "a necessary move to get the country onto a more honest level."


Several joint ventures contacted in St. Petersburg said they had received visits from the tax police. Most said they were aware that financial incentives were being offered for information about tax violations.


Alexander Kalyakin, the Russian director of the Swedish joint venture that owns the Grand Hotel Europe, said that when the tax police visited to claim the $28 million in taxes they had documents from the tax inspectorate alleging that the company had broken the law.


Ferdinand Wieland, the general manager of the Nevsky Palace Hotel, an Austrian joint venture, said he did not know that rewards were on offer, adding "as a businessman there is the temptation to try and get away with not paying taxes and see what happens, but in Russia it is not worth the risk because the penalties are so high."


A representative of a British joint venture in the city, who did not want to be named, said his company had made a minor infringement of the tax regulations which resulted in a fine, but he added that the tax police had been helpful -- even offering clarification of the laws in future if the company required it.


He said he had joked with the officials about the 10 percent commission and that he knew of no such reward offered by the tax authorities in Britain.


Poltavchenko said that all matters regarding taxation are new to Russia. The tax police began operating in 1988 with headquarters in Moscow and branches in most major cities.


By the end of this year the tax police will employ 20,000 officers throughout Russia, he said.