China regularly deploys fighter jets, navy ships and coast guard vessels around Taiwan to press its claims of sovereignty over the island, which Taipei's government rejects.
Taiwan is massively outgunned by China, which has refused to renounce the use of force to bring the island under its control.
"The Coast Guard's manpower is limited but the people power at sea is unlimited," Taiwan's coast guard said in a statement announcing the rewards.
The coast guard called on people, including fishers, to "stay vigilant to abnormal maritime activities" to help counter the growing "threats from the sea" and "all kinds of grey zone harassment tactics" -- actions that fall short of an act of war.
People who reported homicide, piracy, arson and kidnapping to the coast guard could receive up to NT$200,000 ($6,200), while reports of Chinese "stowaways" would be rewarded with NT$50,000, and NT$10,000 for other foreign stowaways.
Verified reports to the coast guard about foreign and Chinese military ships and other vessels would be rewarded with NT$3,000.
China maintains a near-daily presence of naval vessels and warplanes around the island.
Chinese coast guard ships have also been spotted around Taiwan's outlying islands, at times briefly entering its restricted waters.
A series of incidents involving boats from both sides have fuelled tensions across the narrow waterway separating Taiwan and China.
A Taiwanese court in September sentenced a former Chinese naval captain to eight months in prison for illegally entering the island by boat.
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Taiwan News at SinoDaily.com
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