China is set to unify the income tax rate for domestic and overseas-funded enterprises, Friday's Beijing News reports.

Wang Yukang, deputy director of the Department of International Taxation under the State Administration of Taxation, said at a meeting in Guangzhou that the amended law on corporate income tax will be submitted to the State Council in May.

By the end of August, the amendment is expected to be submitted to the National People's Congress (NPC) Standing Committee for review, said Wang.

According to Wang, there will be a transition period before the new law takes effect in 2008.

China has been one of the world's major receivers of foreign direct investment for years, but with foreign businesses establishing dominance in some fields, there has been an increase in the calls to level the playing field for home enterprises.

The current income tax rate for Chinese companies now stands at 33 percent, compared to a maximum of 24 percent for overseas-funded enterprises. The latter group also enjoys numerous exemptions.

It has been generally agreed that a rate of around 25 percent will be a proper and likely choice for the unified tax rate.

Source: Xinhua