Abstract: Accelerating the upgrading of industrial structure and expanding consumption are two tasks China's economic transformation is facing. China's current tax burden is heavy in the processes of production and circulation, and the overall tax system is regressive, which is difficult to meet the requirements of high-quality development stage. Increasing the proportion of direct tax step by step is the inevitable requirement of China's economic transformation. In the future, we should formulate a tax reform plan to gradually increase the proportion of direct tax from the perspective of full-caliber government revenue on the basis of clearly defining the expenditure demand and structure.

Key words: economic transformation, tax structure, direct tax, industrial structure upgrading, expansion of consumption