China proposed consolidating three local levies into a single “local surtax” with an 11-13% rate set by provincial governments, CCTV reports

• The existing taxes generated CNY 913.4bln in 2025
• Public feedback is open until 27th September
• Experts said the reform targets tax-burden neutrality, with the current combined average burden at about 11.6%

Consolidation of overlapping local levies into a single surtax fits a long-running pattern in Chinese fiscal reform: streamlining the revenue structure at the subnational level while formally holding the aggregate burden steady, with the stated neutrality target and the published average burden designed to pre-empt fears of a stealth tax rise. The 11-13% band, set provincially rather than centrally, is the operative detail; discretion of that kind has historically produced divergence across provinces, with fiscally strained regions gravitating toward the top of the range and wealthier ones toward the bottom, so the eventual distribution of chosen rates matters more than the headline band. The revenues at stake are material in aggregate but modest relative to total local government financing needs, and reforms of this type have generally been read as housekeeping within the broader effort to regularise local finances rather than as stimulus or tightening. The transmission to markets runs through provincial fiscal capacity and, indirectly, the land-sales-dependent revenue model that consolidation does not itself address. Worth watching are the consultation outcome, any shift in the permitted band, and whether the move is paired with broader measures on local government debt and revenue sharing. As a proposal at feedback stage, this is direction rather than decision.