Premier Wen Jiabao announced in Beijing on Friday that China's tax-rebate system would be reformed soon.
After acknowledging the positive effects of the system on China's economy Wen acknowledged that the government has not paid tax rebates on time to export companies.
The value of the delayed tax rebates was estimated at US$29.8 billion by state media.
The delayed payment of tax rebates is spurring a drying-up of floating capital for foreign trade companies.
China's State Information Center reported that in several provinces the tax rebates have gone almost completely unpaid over the last two years.