Editor's Note: The revision of the Law of the People's Republic of China on the Administration of Tax Collection has long drawn the attention of the business community, tax practitioners, tax-law academics, and indeed every taxpayer. On October 22, 2026, the 74th Council of Chairpersons of the 14th NPC Standing Committee decided that the 25th Session of the Standing Committee would be held in Beijing from November 2 to 6, and recommended that the Session consider the motion submitted by the State Council for the deliberation of the draft amendment to the Law on the Administration of Tax Collection. This indicates that the draft amendment has completed the drafting stage and the examination and deliberation procedures before the State Council, and is now about to enter the deliberation stage of the Standing Committee. How many deliberations the draft amendment will undergo, when the public will be able to see the draft text, and how the previously disputed provisions will be handled are questions of common concern. This article analyzes these issues in light of the provisions of the Legislation Law and recent legislative practice, with a view to helping all parties track the progress of this revision and participate in the legislative process.

01  A Brief History of the Revision and Key Areas of Dispute

The Law of the People's Republic of China on the Administration of Tax Collection was adopted at the 27th Session of the Standing Committee of the 7th NPC in September 1992, and took effect on January 1, 1993. It has since been amended four times, in 1995, 2001, 2013 and 2015. Only the 2001 amendment was a comprehensive revision, in which the protection of taxpayers' rights and the standardization of tax enforcement were markedly strengthened; the other three were amendments to individual provisions. The current institutional framework took shape in an era in which enterprises were the primary taxpayers and invoices served as the principal means of administration. With the rise of new business models such as the platform economy, livestream e-commerce and flexible employment, the identification of taxpayers and the attribution of income have become considerably more complex. At the same time, tax authorities have been shifting their mode of administration from one based on invoices to one driven by data. Against this backdrop, launching a comprehensive revision of the Law on the Administration of Tax Collection has become a genuine practical necessity.

The preparations for this revision date back more than a decade. In 2008, the amendment was included in the legislative plan of the 11th NPC Standing Committee. In June 2013, the Legislative Affairs Office of the State Council published a draft amendment for public comment; in January 2015, it published a further draft revision for public comment, although that draft was never submitted to the Standing Committee for deliberation. On March 28, 2025, the Ministry of Finance and the State Administration of Taxation jointly released a revised draft for public comment; the comment period ended on April 27 of that year. Unlike the two earlier rounds, the Standing Committee of the State Council discussed and approved in principle the revised draft at its meeting on August 31, 2026, shortly after the comment period had closed—a little over a year later—and decided to submit the draft to the Standing Committee for deliberation. The Council of Chairpersons has placed the relevant motion on the proposed agenda of the 25th Session of the Standing Committee; once the agenda is adopted, the revised draft will receive its first deliberation at that Session.

The revised draft approved in principle by the State Council has not yet been made public. Judging from the draft for public comment, however, it consists of 106 articles in total and, compared with the current law, adds 16 articles, deletes 4 articles and revises 69 articles, covering the entire tax-collection process—tax registration, accounting books and vouchers, tax declaration, tax collection, tax inspection and legal liability. Several of these adjustments have attracted the most concentrated discussion.

The first concerns the system of surcharges. Whether the surcharge functions as an enforcement penalty to urge performance, or as economic compensation for the use of tax funds, has long been debated in both practice and theory. The draft for public comment renames the "surcharge" as a "late-payment charge on tax" and adds circumstances in which such a charge may be waived or exempted, including failure to pay on time due to force majeure followed by payment within the prescribed period, re-payment required by a change in the place of tax payment or in the character of the tax, and payment of tax that has exceeded the statutory period for recovery. To a certain extent, this relieves the burden on taxpayers. However, the daily rate of five ten-thousandths remains unchanged, which translates into an annualized rate of approximately 18.25%—markedly higher than prevailing market interest rates. Moreover, it remains to be clarified whether, after the change of name, the late-payment charge on tax can escape the limitation in Article 45 of the Administrative Coercion Law that "the amount of an additional fine or surcharge shall not exceed the amount of the pecuniary obligation," and whether it still carries a punitive character.

The second concerns the relief available for tax disputes. Article 88 of the current Law provides that where a taxpayer disputes a tax assessment with the tax authority, the taxpayer must first pay or settle the tax and any surcharge in accordance with the tax authority's assessment, or provide corresponding security, before it may apply for administrative reconsideration. This "pay-the-tax-first" prerequisite has long been regarded as raising the threshold for taxpayers to vindicate their rights. The draft for public comment removes the requirement to settle tax before applying for reconsideration, consistent with the Customs Tariff Law, but a taxpayer who is dissatisfied with the reconsideration decision and brings suit must still first pay the tax in full or provide security; the pay-first prerequisite has thus been shifted from the reconsideration stage to the litigation stage. This adjustment lowers the cost of entering administrative reconsideration. That said, the period for bringing suit after reconsideration is only fifteen days, and it is often difficult to arrange tax security within that period; how the two requirements fit together, and whether the threshold at the litigation stage is reasonable, remain matters on which views differ.

The third concerns the digitalization of tax administration. The draft for public comment confirms the legal effect of electronic vouchers and electronic records, provides that the business license directly serves as the certificate of tax registration, and requires e-commerce platform operators to report the identity information and tax-related information of platform-based operators and practitioners and to handle their tax declaration and other tax-related matters as prescribed. These provisions provide a legal basis for "data-driven" tax administration. Nevertheless, the scope of "operators of other online trading platforms" referred to in the draft remains unclear; the legal status and limits of the platform's obligation to handle declarations on behalf of others are not yet defined; and specific rules on the use and protection of tax-related data are lacking.

In addition, the draft for public comment consolidates the four categories of tax-evasion conduct under the current law, together with the conduct of failing to file a return, into two categories of tax evasion—"false tax declaration" and "failure to file"—thereby aligning with the Criminal Law. However, it does not specify the principle of imputation applicable to the determination of tax evasion. In particular, with respect to tax evasion by "failure to file," the draft does not distinguish between intentional and negligent conduct, so that a taxpayer who simply fails to file a return may be found to have committed tax evasion. This point has also generated considerable discussion. Because the positions and demands of the various parties differ, it is all the more certain that the deliberation of the revised draft before the Standing Committee will not be completed in a single step.

02  The Revised Draft Will Likely Undergo Three Deliberations Before Being Put to a Vote

Article 32 of the Legislation Law (as amended in 2023) provides: "A bill on the agenda of a session of the Standing Committee shall, in general, be deliberated at three sessions of the Standing Committee before it is put to a vote." Article 33 further provides: "Where opinions on all sides are relatively consistent with respect to a bill on the agenda of a session of the Standing Committee, it may be put to a vote after deliberation at two sessions of the Standing Committee; a bill involving a relatively single matter for adjustment or only partial amendment may, where opinions on all sides are relatively consistent or urgent circumstances exist, be put to a vote after deliberation at a single session of the Standing Committee." It follows that three deliberations are the general rule, while two or a single deliberation are both exceptions, whose application is conditioned on relatively consistent opinions, a limited scope of amendment, or urgency.

Measured against the actual circumstances of this revision, neither of the two exceptional conditions can be satisfied. As to the scope of amendment, the present revision adds, deletes and revises numerous provisions and therefore does not fall within the category of "a relatively single matter for adjustment or only partial amendment"; as to the consistency of opinions, the draft for public comment has given rise to considerable divergence on many provisions, so that opinions can hardly be described as "relatively consistent." Moreover, for legal revisions involving extensive amendments, high public attention and complex interests, the Standing Committee tends to prefer full deliberative procedures in response to public concern; the draft Administrative Coercion Law, for example, went through six deliberations before enactment. On this basis, the present revision of the Law on the Administration of Tax Collection is highly likely to run the full course of three deliberations.

It should be noted that three deliberations are not simply a matter of "going through the same procedure three times"; each deliberation has its own focus. The first deliberation focuses on hearing the proposer's explanation of the drafting background and main contents, so as to understand the overall framework of the bill. The second deliberation focuses on hearing the report of the Constitution and Law Committee on the revisions made and the main issues, with attention to the disputed provisions. The third deliberation, after absorbing comments and forming a revised text, hears the report on the outcome of deliberation and submits the bill for a vote. Moreover, under the Rules of Procedure of the Standing Committee of the NPC, even if the bill has entered the third deliberation, if major issues still require further study before a final text is formed, the bill may, upon a proposal by the Council of Chairpersons and with the consent of a joint group session or a plenary session, be withheld from voting and referred to the relevant special committee for further deliberation. "Three deliberations," therefore, does not merely mean "three sessions"; rather, it signifies that the law will undergo multiple rounds of layered and progressive deliberation, so that procedural fairness safeguards the quality of legislation.

03  The Draft Text Published After the First Deliberation Is the First Window for Observing the Direction of the Disputed Provisions

The draft of March 2025, the Law on the Administration of Tax Collection (Revised Draft for Public Comment), was the version drafted by the Ministry of Finance and the State Administration of Taxation. Although it has sparked extensive discussion, it does not in fact equal the text that will be submitted to the Standing Committee for deliberation. In legislative practice, after extensive research, consultation with all relevant parties and public solicitation of comments, the Ministry of Finance and the State Administration of Taxation will also draft a version of the Law on the Administration of Tax Collection (Revised Draft for Submission). the State Council, drawing on the draft for submission prepared by MOF and SAT and reviewed by the Ministry of Justice, forms the version to be submitted for deliberation. Whether the revised draft approved in principle by the State Council has absorbed the views expressed by the various parties must be judged by reference to the bill submitted for deliberation; how the revised draft will be refined and revised during the deliberations of the Standing Committee must in turn be judged by reference to the successive deliberation drafts. For this reason, when the revised draft will be made public, and whether public comments will be solicited at the same time, are questions of concern to the public at large. In this connection, Article 40 of the Legislation Law provides: "A bill on the agenda of a session of the Standing Committee shall, after the session, be published to the public together with the bill and the explanations of its drafting and revision for the purpose of soliciting comments, except where the Council of Chairpersons decides not to publish it. The period for public solicitation of comments shall generally be no less than thirty days. The circumstances of the solicitation of comments shall be reported to the public." Under this provision, publication and solicitation of comments are the rule, while non-publication is the exception.

As recent legislative practice shows, important bills are generally published for public comment separately after the first and second deliberations; the Value-Added Tax Law is a case in point. In December 2022, the draft Value-Added Tax Law was for the first time submitted to the Standing Committee for deliberation; the first-deliberation draft was published in full on December 30 and opened for public comment. In August 2023, the bill entered its second deliberation, and the Standing Committee published the second-deliberation draft in full on the NPC website after the session, together with the report of the Constitution and Law Committee on the revisions, which set out the specific changes, and again solicited public comments. In December 2024, after three deliberations, the bill was adopted by a vote of the Standing Committee. From the first-deliberation draft to the second-deliberation draft, the legislature listened to comments and made refinements in each round of publication, and the bill matured progressively in the process.

On this basis, it may reasonably be expected that, after the revised draft of the Law on the Administration of Tax Collection receives its first deliberation at the 25th Session of the Standing Committee, the NPC website will in all likelihood publish the draft in full together with the explanatory materials and solicit public comments. At that point, the public will, for the first time, see the Law on the Administration of Tax Collection (Revised Draft) submitted by the State Council for deliberation. By comparing that version article by article with the Law on the Administration of Tax Collection (Revised Draft for Public Comment) of March 2025, one can begin to see whether, and how, the disputed provisions on the late-payment charge on tax, the pay-the-tax-first requirement in reconsideration, the obligations of platforms, and the determination of tax evasion have been adjusted. As to the timing of the second deliberation, by reference to the customary interval of roughly four to ten months between the first and second deliberations in recent years, the second deliberation—and with it the publication of the revised draft for further comment—may most optimistically occur around April 2027. If deliberation proceeds more cautiously and the interval lengthens, it may be postponed; the precise arrangement will depend on the progress of deliberation and the decision of the Council of Chairpersons.

04  Conclusion

The comprehensive revision of the Law on the Administration of Tax Collection bears directly on the rights and obligations of every taxpayer, on the standardization of tax enforcement, and on the protection of taxpayers' legitimate rights and interests. The entry of the draft into the deliberation stage of the NPC Standing Committee means that this foundational law is one step closer to enactment; the publication of the deliberation draft for public comment, in turn, provides all parties with a window for expressing their views at the legislative level. During the period of waiting for that window, all parties may still conduct in-depth study of the disputed provisions of the draft for public comment and formulate written comments; once comments are again solicited, views may be submitted through the statutory channels to bodies such as the Legislative Affairs Commission of the NPC Standing Committee. Huatai will continue to track the progress of this revision and, after the revised draft is published, will provide timely interpretation and professional support for enterprises in assessing the impact of the revision and in submitting legislative opinions.