In 2025, the Chinese Communist Party has successively introduced six major tax and fee policies, covering areas such as foreign investment reinvestment, luxury car consumption tax, gold trading, export enterprise taxation, social security collection, and e-commerce platform regulation. Scholars point out that these measures, though presented as policy optimizations, actually reflect the authorities’ efforts to maintain fiscal stability by increasing taxes in specific areas amidst financial constraints.
Since July 20, the Ministry of Finance and the State Administration of Taxation have implemented the “Announcement on Adjusting the Luxury Car Consumption Tax Policy,” lowering the threshold for additional consumption tax from 1.3 million yuan to 900,000 yuan (excluding value-added tax), and including pure electric and fuel cell vehicles within the scope. This announcement, approved by the State Council, is seen as an expansion of tax regulation targeted at the high-end consumer market.
Mr. Deng, a maintenance worker at a 4S dealership in Wuhan, mentioned in an interview with reporters that there has been a noticeable decrease in car buyers: “Fewer people are buying cars now, and those who need repairs are learning to fix cars themselves. Although the tax rate has not changed, adjusting the threshold means more models are subject to taxation, effectively increasing the tax burden on high-priced cars. Ordinary people are opting for cheaper cars.”
Deng believes that the government’s policy features “increased taxes without rate adjustment,” indicating the government’s search for new sources of tax revenue in the high-end consumer market. He stated, “In short, the government aims to increase fiscal revenue to offset the fiscal deficit caused by unsold land, but if ordinary people generally do not consume, the government will not collect these taxes.”
The Chinese Communist Party’s “Announcement on Tax Policies Related to Gold” took effect on November 1, specifying that gold trading must be taxed based on delivery and usage classification. Non-investment purposes (such as jewelry and retail gold bars) are taxed at the current rate, while investment-oriented gold remains untaxed. The new policy simultaneously abolishes old regulations from 2002 and 2008, introducing new complementary regulatory measures.
Market researchers point out that the classified management has increased the effective tax burden on the gold industry. Previously, companies often utilized tax exemption loopholes for “investment gold,” but now with stricter oversight, gray trades and false reporting behaviors will be curbed.
Starting in October this year, the State Administration of Taxation has implemented the “Real Identity Declaration System for Export Enterprises,” requiring the termination of using third-party declaration documents. Companies must submit real-name information through the tax electronic system and automatically match it with customs data. This move is viewed as strengthening export tax refund compliance and preventing false reporting.
In terms of people’s livelihood and social security, the Supreme People’s Court issued a judicial interpretation in August, stating that agreements between employers and employees not to pay social security contributions privately are invalid, effective from September 1. The interpretation requires tax and social security institutions across the country to strengthen coordinated collection, normalizing the incorporation of social security taxes into regular monitoring.
Sun Tao, a labor law expert in Guangdong, stated in an interview that this regulation essentially incorporates social security contributions into the tax inspection system. Previously, local governments had been lenient towards companies that underpaid social security, but now, with a shift towards mandatory collection, the aim is to expand non-tax revenue sources to enhance local financial stability.
Additionally, official data shows that non-tax revenue nationwide reached approximately 4.47 trillion yuan in 2024, with a growth of over 25% compared to the previous year; by the first eight months of 2025, it had risen slightly to 2.7 trillion yuan.
Analysts suggest that apart from enforcing social security contributions, local governments are also expanding non-tax revenue sources through increased forfeitures, asset returns, and administrative fees to offset the financial deficit resulting from reduced tax and land transfer incomes.
Many local governments are simultaneously strengthening the management of forfeitures and asset returns, creating a broad “implicit tax increase,” with non-tax revenue becoming a significant secondary source of local finances.
An official from a financial bureau in Eastern China revealed to reporters that in recent years, local governments have depended heavily on “forfeitures and fees to support tax revenue,” with some cities already having forfeiture income constitute over twenty percent of local financial revenues.
In June, the State Administration of Taxation issued the “Regulations on Internet Platform Enterprises Submitting Tax-related Information,” effective since June 20. The new regulations require e-commerce, live streaming, and short video platforms to collect information on businesses and individual operators’ identities and incomes, submitting them to tax authorities regularly.
In April, the Ministry of Finance and the State Administration of Taxation released the “Announcement on Prepaid Tax Offset for Foreign Investors for Profit Reinvestment,” allowing foreign-funded enterprises to apply for a 10% tax offset on reinvestment between 2025 and 2028, while simultaneously reporting income and fund usage. Analysts view this move as both an encouragement for investment and an extension of oversight on foreign investment profit distribution.
Lu Gang, a finance and economics scholar at Zhejiang University (pseudonym), emphasized that tax types and rates must be deliberated by the National People’s Congress or its Standing Committee, and adjustments made by departments fall within authorized areas. However, Lu Gang stated to reporters that this reflects the Communist Party’s “structural revenue increase,” utilizing detailed regulations under the guise of optimization to achieve increased tax revenue without involving legislative levels.
He remarked, “Many regulations introduced this year have been issued under the auspices of various departments, circumventing the parliamentary vote in the National People’s Congress. Such practices would surely not be allowed in Western countries.”
Scholar Sun Tao mentioned that the major measures taken by the authorities this year in terms of increased tax burdens or reinforced regulations involve luxury car consumption tax, gold trading tax, foreign investment tax exemptions, real-name export taxation, social security collection, and e-commerce platform tax reporting. Except for the encouraging foreign investment policies, the rest aim to strengthen regulation or expand the scope of taxation.
Tax law experts point out that the above measures are conducted in accordance with the “Legislation Law” and the “Provisional Regulations on Value-Added Tax” authorization articles, constituting legal administrative actions. However, the frequency of these actions indicates that the authorities have entered a stage of “micro-level taxation,” utilizing detailed methods to enhance fiscal revenues.
According to data from the Ministry of Finance of the Chinese Communist Party, in the first three quarters of 2025, the national general public budget revenue increased by a mere 2.4% year-on-year, with local revenue growth below 1%. Analysts in academic circles suggest that local debt pressures and tight grassroots finances have led central and local governments to rely more on fine-tuning tax policies and strict enforcement to maintain fiscal balance.