China enhances tax compliance to boost national market unity

China's State Taxation Administration (STA) has recently unveiled the impressive outcomes stemming from its newly implemented tax compliance regulations aimed at enhancing market transparency. These measures are designed to improve business practices while simultaneously reducing unfair competition in the marketplace.

To date, over 8,000 domestic and international platforms have complied with the obligation to submit tax-related information as stipulated by the regulations. The STA notes that tax compliance has significantly improved among business operators and practitioners using these platforms.

The outcomes illustrate that the governance of China's platform economy is evolving toward a more institutionalized and digitalized phase, contributing to the development of a unified national market, according to insights from a Chinese expert.

Since the introduction of these regulations, the number of tax-paying merchants operating on the platforms has surged by 32 percent compared to pre-implementation figures. Furthermore, merchants have increasingly demonstrated a proactive stance in requesting invoices from their upstream suppliers, as noted by the STA.

Additionally, small-scale taxpayers have seen a 25 percent increase in the number of invoices obtained from their suppliers via these platforms in comparison to the previous year.

The STA reports a significant reduction in disorderly and 'involution-style' competition, which includes tactics such as artificially inflating sales performance through fraudulent transactions.

The reforms have also extended into cross-regional tax and fee services, with over 130 billion yuan, approximately 18.96 billion dollars, in cross-provincial electronic tax payments recorded in 2025—marking a notable 39 percent increase year-on-year. Furthermore, nearly 40,000 taxpayers successfully navigated cross-provincial relocations, which is an 18.7 percent rise compared to the previous year.

These achievements substantiate that the new regulations have created institutional safeguards aimed at enhancing market transparency and fairness. They also contribute to forming a well-regulated, orderly, open, and efficient unified national market, according to Li Changan, a professor at the Academy of China Open Economy Studies.

Li elaborated that improvements in regulatory capacity have allowed tax authorities to gain a more comprehensive understanding of business activities across platforms. Persistent challenges such as hidden income and information asymmetry have been markedly ameliorated through advanced institutional arrangements and technological enhancements.

The regulations have thus fortified market transparency and fairness by instituting unified rules, standards, and a cohesive data infrastructure, providing the necessary institutional backing for a well-regulated, orderly, open, and efficient unified national market.

This comprehensive reform initiative signifies a pivotal turning point in China's economic policy, illustrating the government's commitment to fostering a conducive environment for business integrity and competition.