CHINA'S taxation authorities announced yesterday that they will scrap two taxes on interest paid on local government bonds, hoping to make the bonds more attractive to domestic investors.

The Ministry of Finance and the State Administration of Taxation said in a joint statement that companies and individuals will be exempt from corporate and individual income taxes on the interest they collect upon purchasing local government bonds issued in 2012 and later. The preferential tax measures will only apply to those bonds issued by the ministry on behalf of the local governments of provinces, autonomous regions, municipalities and cities with independent budgetary status.