BEIJING, Aug. 28 (Xinhua) -- China's Ministry of Finance on Friday released a draft law on local surtaxes to solicit public opinion, marking a new step in the country's efforts to improve its local tax system.
Under the draft law, the existing urban maintenance and construction tax, education surcharges and local education surcharges will be rolled into one single local surtax.
The reform will simplify the tax and surcharge system, improve the local tax system, promote fair competition and contribute to the development of a unified national market, experts said.
Provincial-level governments will propose the tax rate within a range of 11 to 13 percent, with the specific rate subject to approval by the standing committees of the people's congresses at the same level and the decisions filed with the Standing Committee of the National People's Congress and the State Council, the draft stated.
This move represents an important step in China's reform of local taxation, said Li Xuhong, vice president of the Beijing National Accounting Institute.
"Following the consolidation, local surtax is expected to become the largest single tax category in the local tax system," Li noted.
The introduction of a range-based tax rate would give local governments greater authority over tax administration and help encourage them to improve local tax collection and management, Li explained.
The overall tax burden is expected to remain broadly unchanged after the reform, said Fan Yong, dean of the Central University of Finance and Economics' School of Public Finance and Taxation.
Fan said this legislation will help improve the efficiency of tax and fee governance and strengthen the local tax system. ■
