Tracking China’s Progress Towards Law-Based Taxation

UPDATE (Sept. 8, 2018): This post has been updated based on the 13th NPCSC five-year legislative plan.


China currently collects 18 types of taxes. They will generate an estimated total of 8 trillion RMB in revenue for the Central Government in 2018. But only six of them—providing only about a third of the central tax revenue—are imposed by laws (法律) enacted by the legislature, the NPC or its Standing Committee (NPCSC). The rest are governed only by interim regulations (暂行条例) adopted by the State Council—the Central Government itself. The enormous taxing power the State Council now wields was in fact granted by the NPC in 1984. Now, over three decades later, the NPC is reclaiming that power by gradually elevating the interim regulations into laws, with an eye to complete the process by 2020. In this post, we will explain why the NPC made the power grant in the first place and discuss what it has recently been doing to reassert its control over taxation.

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26th Session Watch Pt. 2: A Closer Look at the Three Bills Under Review (UPDATED)

Update (Feb. 24, 2017): By a vote of 156-0, with one abstention, the NPCSC approved the revised Red Cross Society Law, which will take effect on May 8, 2017, the World Red Cross and Red Crescent Day.

By a vote of 156–1, the NPCSC also passed an amendment to the Enterprise Income Tax Law (Amendment), effective today. The change made by the Amendment is discussed below. Zhang Tianli, an official with the Ministry of Finance, stated at a press conference today that the Amendment would retroactively apply to charitable donations made before today but after September 1, 2016, when the Charity Law came into force. Zhang also said that the State Council would soon amend relevant regulations to implement the Amendment.

The NPCSC today also approved three cabinet appointments. He Lifeng was promoted from Deputy Director to Director of the National Development and Reform Commission. Zhong Nan was appointed Minister of Commerce; he was a vice commerce minister and the Ministry’s International Trade Representative. Bloomberg profiles the two in this article. Lastly, Zhang Jun was appointed Minister of Justice. Before heading the Justice Ministry—which, among other duties, oversees China’s lawyers, prisons, and legal aid—Zhang was a Deputy Secretary of the Communist Party’s Central Commission for Disciplinary Inspection. He also twice served as a Vice President of the Supreme People’s Court. He has a Doctorate in Criminal Law.

We expect the NPCSC to solicit public comments on the draft revision to the Anti-Unfair Competition Law next week. The NPC’s annual plenary session will open on March 5, and we’ll soon post a preview of our coverage of the session.


Yesterday the 12th NPC Standing Committee (NPCSC) opened its 26th session, where the following three bills were submitted for deliberation. The following is a summary of the content of these legislations based on multiple media reports.

Continue reading “26th Session Watch Pt. 2: A Closer Look at the Three Bills Under Review (UPDATED)”

26th Session Watch Pt. 1: NPCSC to Review Draft Revisions to Enterprise Income Tax Law and Anti-Unfair Competition Law

The 12th NPC Standing Committee (NPCSC) will convene its 26th Session from February 22 to 24, the Council of Chairmen decided today. The following is our customary report on the proposed agenda of the upcoming Session.

Continue reading “26th Session Watch Pt. 1: NPCSC to Review Draft Revisions to Enterprise Income Tax Law and Anti-Unfair Competition Law”