Tax reform imminent for fairer society and growth
The National Audit Office recently proposed that the country intensify its tax and fee collection and management, improve departmental data sharing, and plug the existing system loopholes, to consolidate the growth of its fiscal revenue.
For a long time, some local governments have used tax incentives, financial subsidies, rebates and other means to attract investment.
In the context of reduced land income and increased financial pressure, strengthening tax and fee collection and management can not only increase local financial revenues, but also help the survival of the fittest and contribute to the building of a unified national market.
As China enters a new stage of development, its previous fiscal and taxation systems already cannot align with the new development situation. After bidding farewell to the high-speed growth stage and entering the era of high-quality development, the growth rate of tax and land transfer revenue have begun declining.
At present, the market is concerned about how to adjust the central and local fiscal relations. As land revenue continues to decline and local governments' debt pressures increase, a sound and sustainable local tax system is needed to meet local government spending needs.
The country thus needs to clarify the relationship of power and responsibilities between the central and local governments, and promote the reform of consumption tax as a means to increase tax sources for local governments.
It also needs to narrow the gap between rich and poor and establish a fairer personal income tax system. The reform of personal income tax should be launched based on comprehensive income to give play to the role of the tax in adjusting income distribution.
The new fiscal and tax reform should help improve the efficiency of resource allocation and promote a fairer society, so that a basic institutional framework and strong support should be provided for the country's high-quality development.
-21ST CENTURY BUSINESS HERALD
