The State Council will receive the legal right to make adjustments to the stamp duty on securities transactions, according to a new stamp tax law seeking public opinion, The Paper reported.

China is planning to turn its current provisional regulations on the stamp tax into the Stamp Tax Law. Currently, the stamp duty on securities transactions is levied on the transferor at a rate of 1‰.

The 1‰ tax rate remains the same under the new law, and, the State Council can still adjust the tax rate. However, this gives the legal right to the State Council to adjust the duty.

Normally, the tax law should be stipulated by the National People’s Congress, China’s law-making body.

Shi Zhengwen, director of the Finance and Tax Law Research Center at China University of Political Science and Law, thinks it sends an important signal that giving the State Council the legal right will be beneficial to regulators to make timely and effective regulations to rein in the stock market.