Authorities 'to be hit by adjustment to VAT'

A media report that local governments' share of value-added tax revenues will be raised from 25 percent to 50 percent will not make up for the disappearance of the business tax in China, according to an analyst.

Beijing may need to use other sources of revenue to compensate local authorities, the analyst said.

Zhang Lianqi, a financial expert close to the Ministry of Finance, said the increase is very likely to be introduced, while the ministry did not respond to a request for comment.