As the real estate market has entered a bear market, the income from land sales of local governments in China has also fallen into a rare "downturn".
This year's income from land sales has dropped sharply.
According to the report released by the Ministry of Finance today, in the first five months of this year, the revenue from the transfer of state-owned land was 1,281 billion yuan, a year-on-year decrease of 14%; land value-added tax was 244.2 billion yuan, down by 5.3 percent.
This 14% decline does not seem like much, but if we look at it by province, we will find a serious problem, that is, some provinces have seen a relatively rapid negative increase in land transfer fees. This will bring a huge test to the fiscal revenue of local governments.
So, how do we deal with the overall decline in land sales revenue? Is China's fiscal and tax reform imperative? If we want to change it, how should we change it?
Today we will talk about these topics, welcome to like, forward, and favorite.
Land transfer fees plummeted, and local governments ran out of money?
Judging from the chart below, the growth rate of land transfer fees in many provinces has decreased significantly. For example, in Anhui and Ningxia provinces, the year-on-year growth rate of land transfer gold is about -60%.
Guangdong, Guizhou and other provinces also have close to -60% of the income from land sales to ease, if Guangdong also has manufacturing and trade tax as compensation, then the relative lack of economic development in Anhui, Guizhou and other provinces, is facing very great pressure.
In the first five months of this year, land transfer fees increased year-on-year.
Because the main source of income from local "government funds" is land transfer money, the decrease in land sales income means that the funds available to local governments will be reduced, and the government has no money, which will lead to an increase in local debt, which will affect the local economy and the normal operation of government functions.
Even, if the local government still borrows money to make some political achievements, it will lead to the expansion of local debt risks, which is what we call the "local debt" problem.
The world's first "unfinished building" has led to the expansion of local debt.
According to the IMF cited by the Chinese Academy of Social Sciences, in 2019, the hidden debt of local governments in the mainland reached 42 trillion yuan, accounting for 43% of GDP that year.
It should be noted that some senior economists on the mainland, such as some deputy directors of the Chinese Academy of Social Sciences and directors of research centers, have already focused on the issue of local government debt in the past few years, and have proposed that China needs to "turn debt" into debt.
The debt burden itself is very heavy, coupled with the reduction of income from land sales, and a series of livelihood functions must be completed, which violates the fundamental principle of tax expenditure.
The risk of local debt has not been completely resolved.
Therefore, if you want to change the current predicament, there is only one choice left for local governments, and that is fiscal and tax reform.
How to reform fiscal and taxation reforms? A tax on the rich?
When it comes to tax reform, there are 5 new "collection columns" in today's personal income tax APP, which are business income, interest, dividends and bonus income; leasing of property; transfer of property, and incidental income.
Individual income tax APP update
After seeing it, many people think, is the scope of national taxation going to be expanded again? In the future, the house will be rented, and the dividends and dividends earned from stocks will be taxed? Is the focus on a "rich man's tax" on business owners and the middle class?
Subsequently, the reporter also conducted an interview, saying that the update is to better meet the needs of taxpayers and provide more comprehensive and convenient tax services. Summarizing all income into the individual income tax APP is conducive to making it easier for taxpayers to inquire, check and declare individual income tax.
To put it simply, it only provides inquiry, but does not perform final settlement, that is, it only looks at it and does not collect it.
But now it's just a matter of seeing, will it be levied in the future? That's the problem. So this move, in fact, leads to the above topic, fiscal and tax reform is imperative, but how to change?
In fact, at the end of last year, the top management said that it would "plan a new round of reform of the fiscal and taxation system", which was the first time that a new round of reform was officially issued. And this is actually very important for the development of China's economy.
For example, the reform of the tax-sharing system in 1994 directly led to the enrichment of the central government's finances and the weakening of local finances, and directly detonated the real estate industry, as well as related land finance, and land sales income, and also led to local governments to vigorously develop the economy, attract investment, develop manufacturing and so on.
In 1994, the reform of the tax-sharing system successfully allowed China's economy to take off.
Therefore, this reform is also very crucial, and the reform actually has a task, and the task this time is actually to deal with new problems: excessive local debt pressure, how to enhance fiscal sustainability, and so on.
So, at present, what are the new ideas for reform?
First, some experts believe that fiscal and taxation reform needs to consider long-term issues, that is, how to better develop the economy, such as reducing taxes for enterprises, promoting industrial transformation and economic development, and standardizing the relationship between the government and enterprises. This kind of long-term reform is what we need.
Second, some experts believe that although the previous reform of the tax-sharing system has promoted the development of local governments' manufacturing industry and promoted the prosperity of China's economy, it has also brought a series of problems.
For example, in order to intercept tax sources, it leads to excessive competition among local governments, market fragmentation, and the prevalence of local protectionism. Why are there so many auto companies in China? What does every province want to do?
Local governments encourage manufacturing because they can intercept tax sources.
To put it simply, because the manufacturing industry can generate a lot of tax revenue, as long as the automobile companies produce in Zhejiang, then these taxes will go to the local government. Therefore, each province will attract some enterprises to build new energy vehicles, resulting in excessive competition and involution. As a result, a lot of resources are wasted.
Third, the pressure on local finances and the aging of the population have led to increased pressure on social security, and now local governments are now relying on 2 trillion yuan of subsidies from the central government every year to get by. This kind of subsidy policy is not very sustainable, so how to rebalance the tax power of the local and central governments is also a question that needs to be considered.
Fourth, it is the problem of developing tax sources, which is the most concerned issue for ordinary people, such as the 19-year personal income tax reform, the 16-year business tax reform, and the more perfect taxation methods brought by big data, which has led to stricter tax supervision and it is difficult to evade taxes.
The fourth phase of the Golden Tax makes tax evasion more difficult
If China's economy is sluggish at the moment, then for enterprises, they will feel that they should collect more taxes, so in what areas will we increase taxes?
At present, it is mainly consumption tax and personal income tax, such as consumption tax on tobacco and alcohol, such as luxury cars, such as some high-energy-consuming industries, and high-end service industries such as leisure clubs and five-star hotels, etc., which are the tax sources we are considering expanding.
From this point of view, in fact, it is still "robbing the rich and helping the poor", the rich have money, so the relevant high-end fields involved will be taxed more, and ordinary people have no money, so they will not be collected, or less will be collected.
The United States levies a tax on the rich, will China also levy a tax on the rich?
Not only that, but the taxes on capital dividends, property transfers, property leases, etc., as mentioned above, are also expected to be reformed.
Because China's taxation has always been "heavy tax on labor and light tax on capital", which means that people with more money pay less taxes, while people who work part-time pay more taxes, which is actually debatable.
summary
In general, the problem of local debt has been discussed for several years, and many experts and scholars have called for fiscal and tax reform to solve the crisis of local debt.
With the end of the current round of real estate cycle, the local government's land transfer income has decreased year by year, and the debt pressure has become greater, which has forced the top management to carry out fiscal and tax reforms and systematically solve the problem.
Of course, the current situation of China's economy makes it inappropriate for us to use real estate tax instead of land transfer fees, but should focus on the long-term and take stimulating and boosting China's economic development as an important task. So as to optimize the structure of fiscal expenditure.
Some counties have already begun to downsize significantly.
Therefore, we have seen that in recent years, government agencies have begun to live a "hard life", because it is difficult to open source, so we need to reduce expenditure, and even reduce the number of government units and institutional establishments to reduce the pressure on expenditure.
Of course, the specific reform, in fact, still needs China's top experts to get together, after many rounds of deletion and discussion, and finally handed over to the above, we can only have one more discussion, but I also believe that the previous fiscal and tax reform, we chose the most suitable path for China, and the reform was also very successful.
This fiscal and taxation reform is bound to be successful!
Then I believe that the reform of China's fiscal and taxation system will also choose to take the path that is most in line with China's current situation, so as to better help the Chinese nation and achieve great rejuvenation!
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【Sakura Wolf Finance】Explore the truth behind the hot spots, welcome to forward, like, and comment. The source of the picture comes from the Internet