Reform of the State Tax and Local Tax Collection Administration System printed and distributed by General Office of the CPC Central Committee and General Office of the State Council of the People's Republic of China (hereinafter referred to as “the Reform”) was issued formally. As specified in the Reform, the collection and management responsibilities of state tax and local tax shall be defined reasonably and in-depth cooperation of state tax and local tax should be developed in such links as tax payment service.

    China's existing tax collection system was determined in tax reform system in 1994. That is to say, incomes are allocated into central tax, local tax and shared tax based on the variety of tax and two taxation authorities including state tax and local tax ones are established for collection and management. In terms of establishment of honest tax payment mechanism, the parties included in “blacklist” of taxation law violation are prohibited from high consumption, collecting land supplied by land and government’s financial support and going abroad and restrained from financing, credit extension and participating in the government procurement.

The Reform proposed the reform target in 2020: Finish building the modern taxation collection and management system well matched with state governance system and governing capacity modernization, reduce taxation cost, improve collection and management efficiency, enhance tax law abidance and tax payer’s satisfaction, ensure the role of taxation can be exerted effectively and promote healthy economic development and social equity and justice.

Policy Interpretation

Tax collection system will welcome “qualitative change” along with the reform.

---Interpretation on Reform of the State Tax and Local Tax Collection Administration System

Reform of the State Tax and Local Tax Collection Administration System printed and distributed by General Office of the CPC Central Committee and General Office of the State Council of the People's Republic of China is formally issued to the mass today, which means that the reform of China’s tax collection and management system opens its curtain.

The Reform was ratified by the 17^th meeting of the Central Leading Group for Comprehensively Deepening Reforms in this October through deliberation, which provides top-level design for China’s tax collection system reform for some time.

Reform is straightly aimed at “pain points” and tax collection system will welcome“qualitative change”

The Reform scheme defines the purpose explicitly at the very beginning and is straightly aimed at the “pain points” in China’s tax collection and management system, including unclear division of responsibilities, non-uniform law enforcement and inconvenient tax matters handling.

 With a strong focus on resolving the problems above, more than 30 specific measures in 6 categories were proposed in the Reform, including “making clear the division of tax collection and management responsibilities between state tax and local tax, between local tax and other departments”, facilitating taxpayers and normalizing tax citizens with the greatest efforts”.

Adapting to tax distribution system fiscal system and deepening cooperation between state tax and local tax

  China's existing tax collection system was determined in tax reform system in 1994. That is to say, incomes are allocated into central tax, local tax and shared tax based on the variety of tax and two taxation authorities including state tax and local tax ones are established for collection and management.

It can be said that tax distribution system can arouse the enthusiasm of both central and local departments and will play a vital role in establishing and improving socialism market economic system. Tax reform is being accelerated through the progress of more than two decades; some bottlenecks and problems appeared at the same time gradually.

Elaborate reform item by item with specific route diagram and timetable

Of course, the Reform has rich contents, such as tax payment service, mode of tax collection, international tax cooperation, etc. and therefore it is systematic comprehensive reform that elaborates many reform measures.

    In particular, to strengthen tax payment service and promote honest tax payment means a lot in it; the national tax payment service will be under national unified process; taxpayer’s credit record will be established comprehensively and the parties included in “blacklist” will be granted with a series of punishment measures, such as prohibition on high consumption and abroad travel and restrictions on financing and credit extension.