The reform plan released by the State Council on March 13th, 2018 stipulated that "the state tax and local tax agencies at and below the provincial level shall be merged, and they shall undertake the specific responsibilities for the collection and management of various taxes and non-tax revenues within the jurisdiction area. After the merger of state tax and local tax agencies, a dual leadership and management system that takes the State Taxation Administration of China as the mainstay and the provincial (district, municipal) People's Governments as the support shall be implemented.” Combined with the main points of tax system reform this year and the period of time later, the combination of tax system is generally stepping towards a standardized, efficient and unified tax administration system of China. At the administration level, we should collect all the taxes receivable, reduce the interference of the local governments on the authority of the tax law, and reduce the difference between the statutory tax rate and the actual tax rate. In terms of the tax system, we should use tax reduction policies to decrease the legal tax rate. As for the structure, the combination is conducive to the increase of direct tax, thus laying the foundation for reducing indirect tax.From a longer-term point of view, the combination of state tax and local tax is conducive to the formation of a standardized and efficient tax system. It is also beneficial to the improvement of China's tax system structure, and the future tax reduction policy can be truly implemented.
