The State Taxation Administration unveiled this week the outcomes of key initiatives carried out in 2025, designed to build a unified national market and support high-quality economic development via fairer tax policies.

A core component of these initiatives was strict governance of unlawful tax practices tied to local investment incentives, with a disciplinary rule enforced that prevented local tax authorities from participating in or overlooking such activities. Last year, 389 leads on suspected violations were investigated, with confirmed cases promptly rectified.

According to Xu Sheng, a researcher with the economic research institute of the National Development and Reform Commission, this move targeted involution-style competition among regions that often relies on preferential tax policies to attract businesses, which can distort market order and crowd out compliant enterprises.

To level the playing field between online and offline businesses, authorities last year implemented new regulations on tax information reporting for internet platforms, with over 8,000 platforms now in compliance. This effectively dismantled information barriers created by the separation of business registration and operation locations, thereby curbing fraudulent transactions that undermine fair competition, experts said.

Significant progress was also made last year in streamlining cross-regional tax services, cutting average processing times by five to 10 days and enabling cross-provincial electronic tax payments to exceed 130 billion yuan ($18.78 billion) in 2025, up 39 percent year-on-year. These improvements reduced transaction costs for businesses operating across regions, facilitating the efficient flow of capital and labor in line with market demand.

Xinhua - China Daily