The Ministry of Finance has denied reports indicating the mainland's value-added tax (VAT) will be slashed.
The People's Daily quoted an unnamed Finance Ministry official saying Beijing had 'no plans to lower VAT'.
He said: 'Recent domestic and overseas reports of lowering the rate were inaccurate and irresponsible.' The news of a possible VAT cut led to a price rally of red chips and H shares last week on Hong Kong's stock exchange, according to brokers.
Beijing-based China Economic Times last week reported that a revising of temporary rules on VAT would lead to a lowering of the charge.
The VAT, presently at 17 per cent, is among the highest in the world.
As a result, compliance is far from uniform.
The People's Daily said enterprises went to extraordinary lengths to avoid the charge as they tried to improve their price competitiveness.