Consumption tax law in the pipeline

Measure to focus on reform of existing system, boost local govt capabilities

China must reform its existing tax system, which gives local authorities a greater share of the tax income, as the aggressive tax cut program and economy-boosting spending has increased fiscal deficits, said analysts.

The Ministry of Finance is drafting a consumption tax law, which will focus on reforming the current tax system, strengthening the ability of local governments to deal with larger tax and fee reductions, and improving the consumption environment, said a senior official on Thursday.