Beijing is resolved to end the two-decade-old policy used to attract foreign capital as domestic firms face growing competition under the World Trade Organisation.

But the renorm has been progressing slowly due to resistance from local officials eager to attract foreign funds, analysts say.

"The scheme will soon be submitted to the State Council (cabinet) for further discussion," the newspaper quoted Zhang Peisen, a senior researcher at the State Administration of Taxation.

From there it could go to the standing committee of China's parliament for final approval, he said.

Many foreign-funded firms enjoy preferential income tax rates as low as 15 percent set by local authorities while domestic firms are typically taxed at 33 percent.

The government may implement a unified tax rate for domestic and foreign firms some time next year, but such a rate had yet to be decided, the newspaper said.

"Some said the rate should be 25 percent, while others said it should be 27 percent," Zhang was quoted as saying.

"The more open market needs a fair tax environment for domestic and foreign-fund companies so that they can compete on an equal footing," Ni was quoted as saying.

China would still offer tax incentives for some foreign companies even after the government unifiel tax policy, Ni said without elaborating.