Abstract: According to the division of tax powers, there are two kinds of standards in distinguishing local taxes, one is tax autonomy, and the other is the right of tax revenue. Under the different standards, there are different mechanisms to configure local taxes. The tax autonomy pays attention to the liquidity and benefits of the taxes, while the right of tax revenue pays close attention to the regional financial resources equilibrium and the stimulus to local government behaviors. Based on the constraints of practical conditions, China’s local taxes should be configured according to the standard of the right of tax revenue; and its main body is the portion of VAT shared by local governments, while the exclusive taxes of the local governments can only play a supplement role. Therefore, the core of China’s local tax system reconstruction is the reform of the sharing mechanism to VAT.

Key words: local tax; tax autonomy; the distribution right of tax; local tax system; the sharing mechanism to VAT