The proposed "Enterprise Income Tax Law" will end preferential tax rates for foreign companies, bringing them on par with tax rates for domestic firms, the Wall Street Journal reported. A draft of the law detailed that a 25% tax rate would be set for both foreign and domestic companies, while most existing tax holidays would be phased out in five years. The law will be submitted to the National People's Congress in March, where it will probably be passed. It could come into effect in 2008. Domestic firms pay 33% in taxes while foreign companies can pay as little as 15%. "In the past, having different tax policies for foreign and domestic companies was necessary, and played an important role in attracting foreign investment and stimulating economic growth," Wang Li, deputy commissioner of the State Administration of Taxation, said. The government has not officially released the draft law.