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The low-carbon transformation is the key to China's high-quality economic development. This paper uses the panel data of 278 Chinese cities to measure low-carbon total factor productivity (LCTFP) and examines the impact of environmental protection tax (EPT) reform on LCTFP. EPT significantly promotes LCTFP. The promotion effect is more significant in the lower administrative level and resource-based cities in central and western regions. EPT promotes LCTFP through three channels including green technology innovation (GTI) effect, industrial structure upgrading effect and forcing effect. EPT has a negative spatial spillover effect on LCTFP in neighboring areas. This paper provides important empirical evidence for further advancing the EPT in China. • EPT significantly promotes LCTFP. • The promotion effect is more significant in low administrative level and resource-based cities in central-western region. • EPT promotes LCTFP through green technology innovation, industrial structure upgrading and forcing effect. • EPT has a negative spatial spillover effect on LCTFP in neighboring areas. [ABSTRACT FROM AUTHOR]