On 20 July 2018, the General Office of the State Council endorsed the Regulations on the Reform of the Taxation and Administration System of National Taxes and Local Taxes (the "Regulations"), which clarifies that social insurance premiums will be uniformly collected by the tax authorities from 1 January 2019; the most stringent form of social security collection in the history of Mainland PRC.

On 20 August 2018, the State Administration of Taxation, the Ministry of Finance, the Ministry of Human Resources and Social Security, the National Health and Health Council, and the National Health Insurance Bureau jointly held a mobilisation and deployment meeting to discuss social insurance premiums and non-tax revenue collection and management duties in Beijing. During this meeting, it was decided that the transfer of social insurance premiums and the first batch of non-tax revenue collection and management duties must be completed by 10 December 2018. From 1 January 2019, these will be officially administered by the taxation department.

Social insurance premiums will be collected and managed by the taxation department, however, the payment base, rate or equivalent will remain governed by current social insurance laws and regulations and, therefore, will not cause any major change.

In China, the national network of tax authorities has the highest administrative efficiency in the collection of fees compared to human resource and social security authorities. It is expected that this transformation will strengthen the collection of social insurance. Paying social insurance is a statutory obligation of any enterprise in Mainland PRC. Enterprises are advised to review their payment process and correct any non-compliant behaviour as soon as possible in order to avoid associated legal penalties.