The State Council issued a circular to redistribute the value-added tax (VAT) revenue to local governments, as an effort to encourage both the central and local governments to participate in the tax reform.

According to the circular, the current VAT rebate rates, set since 1994, will be replaced by a flat quote, referring to the 2015 rates. It will no longer add or deduct the amount of rebates to regions that see an increase or decrease in VAT revenue. The specific rebate amounts will be assessed and decided by the Ministry of Finance.