Tax Administration Reform in China: Achievements, Challenges, and Reform Priorities

IMF Working Papers, March 17, 2016

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Tax administration improvements have contributed significantly to a doubling of China’s tax-to-GDP ratio since the mid-1990s.
Tax administration reforms have substantially reduced taxpayers’ compliance costs since the mid-1990s.
The paper describes the key features of China’s tax administration and their evolution over the last 20 years.
The paper identifies emerging challenges to the tax system and areas where further tax administration improvements are needed to sustain tax revenue and reduce taxpayers’ compliance costs in the future.

Evolution of tax administration
- Key features of China’s tax administration and their evolution over the last 20 years are described.
- Emphasis on how administrative changes supported revenue mobilization and compliance-cost reductions.
Emerging challenges
- The paper identifies emerging challenges to the tax system that could affect revenue sustainability and taxpayer compliance costs.
Areas for further improvement
- The paper outlines areas where further tax administration improvements are needed to sustain tax revenue and reduce taxpayers’ compliance costs going forward.

Subject: Compliance costs, Revenue administration, Tax administration core functions, Tax collection, Tax law, Tax policy
Keywords: China Tax Administration, Compliance costs, core tax administration function, D. tax administration, Global, income tax, local government, OECD tax agency, service hall, service hotline, single tax, tax administration, Tax administration core functions, tax administration function, tax agency, tax authorities, Tax collection, Tax law, tax officer, value-added tax, WP