The goal of the research is to improve China's tax system by reforming the tax-sharing system. The approach involves changing the way taxes are levied, with a focus on imposing excise tax and restructuring the local tax system. The key findings suggest shifting the value-added tax to a central tax, implementing excise tax as a local tax, reducing the value-added tax rate, and changing individual and business income taxes. The proposed solution involves adjusting the VAT share between central and local governments.