CFIC Introduction
◆ The operation of local finances is generally stable. In the next step, the Ministry of Finance will resolutely implement the spirit of the decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, further deepen the reform of the fiscal and taxation system, improve the budget system, improve the fiscal transfer payment system, and enhance the matching degree of financial resources and rights of cities and counties.
The operation of local finances is generally stable. In the next step, the Ministry of Finance will resolutely implement the spirit of the decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, further deepen the reform of the fiscal and taxation system, improve the budget system, improve the fiscal transfer payment system, and enhance the matching degree of financial resources and rights of cities and counties.
How will fiscal policy be exerted in the second half of the year?
Talking about the fiscal policy in the first half of the year, Lin Zechang, director of the General Department of the Ministry of Finance, listed a set of data: the national general public budget expenditure in the first half of the year was 13.7 trillion yuan. The central government allocated 8.99 trillion yuan in transfer payments to local governments, accounting for 88.1 percent of the budget at the beginning of the year. Last year's 1 trillion yuan of additional treasury bonds was issued to all localities, and basically all of them have been implemented in projects. As of July 26, 1.9 trillion yuan of new local government bonds have been issued this year, and more new infrastructure, new industries and other fields have been included in the scope of special bonds, and the allocation of special bonds is tilted towards areas with full project preparation and good use benefits. This year, 1 trillion yuan of ultra-long-term special treasury bonds have been arranged to support the "double" project, and 418 billion yuan has been issued as of July 24. Looking forward to the second half of the year, Lin Zechang said that he will focus on four specific tasks: First, better play the amplification effect of government investment. According to the needs and project readiness, we will issue and use ultra-long-term special treasury bonds in a timely manner, and actively support the implementation of the "twofold". Guide local governments to speed up the issuance and use of special bonds, speed up the use of additional treasury bond funds, central budget investment, etc., and form more physical workload. The second is to promote large-scale equipment renewal and consumer goods trade-in. "At present, a notice has been issued that about 300 billion yuan of ultra-long-term special treasury bond funds will be arranged as a whole to support and promote the work of 'two new'. We will actively work with relevant departments to do a good job in this work. He said. Third, we will continue to strengthen basic livelihood protection. Implement fiscal and taxation policies in the fields of employment, education, pension, and medical care, strengthen financial guarantees, and weave a "security net" for people's livelihood. Fourth, strengthen the management of fiscal revenue and expenditure. Organize income in strict accordance with laws and regulations, and do not collect "excessive taxes and fees". Strictly control non-rigid and non-key expenditures, and use fiscal funds to the best advantage. Strengthen the responsibilities of governments at all levels to ensure the smooth operation of grassroots finances.
How to reform and improve the local tax system?
The Third Plenary Session of the 20th Central Committee of the Communist Party of China (CPC) made comprehensive arrangements for deepening the reform of the fiscal and taxation system and put forward clear requirements. Among them, the construction of the local tax system has also attracted wide attention from the market. In this regard, Wang Dongwei, vice minister of the Ministry of Finance, also introduced the relevant reform content from three aspects: expanding local tax sources, appropriately expanding local tax rights, and standardizing the management of non-tax revenues. In view of the expansion of local tax sources, Wang Dongwei said that he will promote the backward transfer of consumption tax collection links and steadily demarcate the localities, take into account factors such as the division of central and local revenues, tax collection and management capabilities, and implement them steadily by item and step by step, expand local revenue sources, and guide local governments to improve the consumption environment. Study the merger of urban maintenance and construction tax, education surcharge, and local education surcharge into local surcharge, and authorize local governments to determine specific applicable tax rates within a certain range. Reform the environmental protection tax to include volatile organic compounds in the scope of collection. With regard to appropriately expanding local taxation powers, he said that on the basis of the unified legislation of the central authorities and the right to levy taxes, we should explore and study the determination of the elements of the local tax system and the specific implementation of the local tax system, giving local governments greater autonomy. In terms of standardizing the management of non-tax revenues, according to him, non-tax revenues mainly belong to local governments and are an important part of local financial resources. The management of non-tax revenue will be standardized, and part of the non-tax revenue management authority will be appropriately lowered, and the local government will manage it differently in light of actual conditions. Deepen the reform of the system of paid use of natural resources. All revenues obtained by relying on administrative power, government credit, and state-owned resources and assets are included in the government budget management. For the issue of toll roads, we will promote the optimization of relevant policies in accordance with the principle of "beneficiaries pay". Wang Dongwei said that he will fully implement the deployment tasks of the "Decision of the Central Committee of the Communist Party of China on Further Deepening Reform and Promoting Chinese-style Modernization", deepen the demonstration of specific reform plans, mature one, and launch one.
How are local finances performing?
The operation of local finances is also a hot spot of social concern. According to data released by the Ministry of Finance, from January to June this year, local general public budget revenue was nearly 6.6 trillion yuan, a year-on-year increase of 0.9%. In contrast, the growth rate of local fiscal revenue in the first half of this year was smaller. In this regard, Wang Jianfan, director of the Budget Department of the Ministry of Finance, said that first, the tax deferment of small, medium and micro enterprises last year raised the base. Second, the prices of some energy and mineral products continue to fall, which has an impact on the realization of general public budget revenue. Third, the policy of raising the standard of special additional deduction of individual income tax introduced in the middle of last year has the impact of reducing revenue this year. In addition, the revenue from local land transfer reached 1.53 trillion yuan in the first half of the year, a decrease compared with the same period last year, but the decline was narrower. Wang Jianfan said that overall, the growth rate of local fiscal revenue from January to June showed a trend of rebounding month by month. Data from the Ministry of Finance also showed that from January to June, the local general public budget expenditure was 11.8 trillion yuan. Judging from the monitoring situation, the expenditure of the "three guarantees" at the grassroots level has been guaranteed, and the key expenditures such as social security, employment, education, agriculture, forestry and water resources have been well guaranteed. At the same time, the central government has stepped up transfer payments to local governments. In 2024, the total amount of transfer payments from the central government to local governments will be 10.2 trillion yuan, and as of the end of June, 8.99 trillion yuan has been disbursed, or 88.1%. "In the first half of the year, the central government issued a transfer payment of 8.99 trillion yuan, the local general public budget revenue was 6.6 trillion yuan, and the general public budget expenditure was 11.8 trillion yuan. Wang Jianfan said. He said: On the whole, the operation of local finances is generally stable. In the next step, the Ministry of Finance will resolutely implement the spirit of the decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, further deepen the reform of the fiscal and taxation system, improve the budget system, improve the fiscal transfer payment system, and enhance the matching degree of financial resources and rights of cities and counties.
Source of this article: Economic Information Daily
Author: Zhang Mo, Zhou Runkai
WeChat editor: Wang Ziqing
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