the proposal of the central committee of the communist party of china on formulating the 14th five-year plan for national economic and social development and the long-range objective for the year 2035 (hereinafter referred to as the proposal), adopted at the fifth plenary session of the 19th cpc central committee, clearly sets out the objectives and requirements, the main tasks and the paths to achieve the establishment of a modern fiscal and taxation system. this is a major strategic and overall plan made by the cpc central committee with comrade xi jinping at its core to keep abreast of developments at home and abroad and the needs of the development of the cause of the party and the country. guided by xi jinping thought on socialism with chinese characteristics for a new era, we need to enhance our "four consciouses", strengthen our "four self-confidence", and uphold the "two principles". we need to fully implement all the tasks of establishing a modern fiscal and taxation system.
establishing a modern fiscal and taxation system is an inevitable requirement for china to seize new opportunities and meet new challenges as it enters a new stage of development
the establishment of a modern fiscal and taxation system is an important guarantee for the comprehensive construction of a modern socialist country. general secretary xi jinping has stressed that it is a strategic arrangement for the development of socialism with chinese characteristics in the new era to complete the building of a moderately prosperous society in all respects, basically realize modernization, and finally complete the building of a great modern socialist country in all respects. the recommendations scientifically analyzed the domestic and foreign environment that china's development was facing in the coming period, and put forward the main goals of the 14th five-year plan for economic and social development and the long-term goals for 2035. establishing a modern fiscal and taxation system is both an important measure and an important guarantee for comprehensively building a modern socialist country. must be obeyed in the service of the central party committee to determine the strategic target, global strategy of the great rejuvenation of the chinese nation and the world as a whole from the big change in one hundred, continue to deepen reform, better play to the modern financial system in the allocation of resources, financial security and the basic role of macroeconomic regulation and control, to deepen the reform of the supply side structural provide effective support and speed up the formation of new development pattern, to realize the basic socialist modernization in 2035 lay a solid foundation.
the establishment of a modern fiscal and taxation system is the essence of promoting the modernization of national governance system and governance capacity. as china enters a new stage of development, it also faces new tasks in reform. we must show greater courage and take more measures to remove deep-seated institutional obstacles, uphold and improve the socialist system with chinese characteristics, and modernize china's governance system and capacity, xi said. according to the proposal, one of the goals for economic and social development in the next five years is to improve the efficiency of national governance and basically modernize china's governance system and capacity by 2035. finance is the foundation and important pillar of national governance. we must establish a modern fiscal and taxation system that is more unified, complete, equal in power and responsibility, efficient, fair, and open and transparent. this will further cement the institutional foundation for the scientific and standardized relations between the government and the market, between the government and society, and between the central and local governments, and make new progress in modernizing the country's governance system and governance capacity.
the establishment of modern fiscal and taxation systems is the consolidation and expansion of the achievements of deepening the reform of fiscal and taxation systems. general secretary xi jinping has stressed that a scientific fiscal and taxation system is an institutional guarantee for optimizing resource allocation, maintaining market unity, promoting social equity and realizing long-term national peace and stability. since the third plenary session of the 18th cpc central committee, in accordance with the decisions and plans made by the cpc central committee, the reform of the fiscal and taxation systems has taken full momentum, made breakthroughs in many areas, and advanced in depth. the budgetary management system has been further improved, the fiscal system has been further improved, significant progress has been made in the reform of the tax system, and the framework of the modern fiscal system has been basically established. must adhere to draw a blueprint to the end, according to the requirements of system integration, collaborative efficiency, strengthen system construction achievements have been achieved, both on the basis of further deepening and development, build modern fiscal and taxation systems, improve the budget allocation of financial resources scientific, normative and effective, and better promote the central and local governments at all levels collaboration, orderly operation, effectively takes office, strengthen tax system promotes the development of high quality, social justice and the role of market unification.
we will further deepen reform of the budget management system and better implement national strategies and guide policies
the government budget reflects the national strategy and policy, and reflects the scope and direction of the government's activities. during the 14th five-year plan period, we will further improve the budget management system by making greater efforts to tap potential, standardize management, improve efficiency and release vitality.
we will strengthen macro - guidance for budget formulation and strengthen overall planning of fiscal resources. we will uphold and strengthen the party's overall leadership throughout the whole process of budget formulation, obey and serve the overall interests of the party and country's development, follow the goals of economic and social development and the overall requirements of macro-control, and guide local governments and departments to properly implement the decisions and plans of the cpc central committee and the state council in budget formulation, plan all kinds of resources and concentrate their efforts to accomplish major tasks. we will improve the government budget system, and better coordinate budgets for government-managed funds, state capital operations, and social insurance funds with general public budgets. we will strengthen the comprehensive management of public resources, and bring into full budgetary management revenues derived from administrative power and state-owned resources (assets), as well as revenues from the auction of franchise rights, in accordance with regulations. we will strengthen the unified management of all kinds of resources by departments and units, and bring all kinds of income into the budgets of departments or units in accordance with the law and regulations.
we will standardize government expenditures and better play the basic role of standards in budget management. we will improve standards for ensuring basic public services, and establish a system of standards for ensuring basic public services that combines national standards with local standards. we will explore ways to make the list of basic public services more manageable, and gradually raise standards and expand the list in light of economic and financial conditions. we will accelerate the development of a standard system for project expenditures, strengthen the application of standards, and establish a mechanism for dynamic adjustment of standards.
we will strengthen budgetary constraints and performance management, and constantly improve the efficiency of allocating financial resources and the efficiency of using funds. we will resolutely implement the decisions and plans of the cpc central committee and the state council, and work out budgets and arrange key expenditures in accordance with the requirements and procedures for budget management. we will strictly implement the budgets approved by the npc and strengthen budgetary control over implementation. we will strictly standardize budgetary adjustments. we will make budgets more open, improve fiscal transparency, and strengthen checks and oversight over the exercise of power. we will deepen reform of performance management, integrate performance concepts and methods into the entire process of budgeting, execution and oversight, and promote the integration of budgeting and performance management. we will promote the development of a system of performance indicators, improve budget performance management and assessment, and consolidate performance responsibilities at different levels. we will improve the performance-oriented budget allocation system, strengthen pre-performance evaluation, strictly manage performance targets, improve the quality of performance evaluation, and improve the incentive and restraint mechanism where budget arrangements are linked to performance results.
we will strengthen management of medium-term fiscal planning and increase financial support for major strategic tasks of the state. we will focus on the major decisions and plans of the cpc central committee, strengthen research on ensuring financial support for major strategies, important tasks, and key reforms, optimize the structure of government expenditures, and promote the implementation of major national strategies, key reforms, and major policies. we will further improve the mechanism for balancing budgets across multiple years, and make medium-term fiscal planning more guiding and binding for the formulation of annual budgets. we will focus on meeting major challenges and fending off major risks, and strengthen the management of government debt and responsibility for medium - and long-term expenditures.
we will further straighten out the fiscal relationship between the central and local governments and give full play to their initiatives
the financial relationship between the central government and local governments is a basic part of the division of powers and responsibilities among governments and an important aspect of modern national governance. during the 14th five-year plan period, efforts should be made to establish a fiscal relationship between the central and local governments with clear powers and responsibilities, coordinated financial resources, and balanced regional financial resources, and promote the formation of a stable system in which the powers, expenditure responsibilities, and financial resources of governments at all levels are commensurate.
clarifying the powers and spending responsibilities of the central and local governments. we will appropriately move up and strengthen the central government's fiscal authority and expenditure responsibility, focusing on matters involving the national flow of factors of production and market unification, and defining those with strong cross-regional externalities as the central government's fiscal authority. we will reduce the number of entrusted affairs and strengthen the central government's direct exercise of fiscal authority and expenditure responsibility. in accordance with the principle of local priority, matters involving regional public goods and services are clearly defined as local financial powers. we will rationally determine the common fiscal powers of the central and local governments, with the central and local governments sharing spending responsibilities in accordance with standardized methods, and further clarify the scope of their responsibilities.
we will improve the financial system below the provincial level. we will take into account the nature of taxes, further rationalize the division of revenue between the central and local governments, and stabilize local expectations. to guide all localities to determine scientifically the income division of local governments at various levels in accordance with the principle of tax distribution. we will move forward with the reform of the division of fiscal authority and spending responsibilities at and below the provincial level, and appropriately strengthen the responsibilities of provincial-level governments in maintaining coordinated local economic and social development and preventing and defusing debt risks. we will urge provincial-level governments to earnestly shoulder the primary responsibility for ensuring basic living standards, wages, and the operation of the three guarantees, accelerate the improvement of the system of transfer payments for people below the provincial level, encourage more financial resources to be allocated to poor areas and communities, and gradually establish a long-term mechanism for ensuring the three guarantees at the community level.
we will make community-level public services more accessible. in light of the nature of fiscal authority, we will clarify the functional orientation of all types of transfer payments, increase support for areas with weak financial resources, and improve the mechanism for regularly evaluating transfer payments. in line with the needs of implementing the policies and the financial resources available, we will make appropriate arrangements for the scale of transfer payments for common fiscal authority and special transfer payments, with the focus on strengthening funding for key areas such as basic livelihood, poverty alleviation, pollution prevention and control, and basic social security for the community at large, and support local governments in implementing the major decisions and plans of the central government. we will improve the system for differences in expenditures and costs between regions, align the allocation of transfer payments with the cost of public services provided by the government, give greater weight to factors affecting permanent residents, and make the allocation of funds more scientific and rational.
we will further improve the modern taxation system and give full play to the functions and functions of taxation
taxation is an important tool for the state to carry out macro-control and adjust income distribution. during the 14th five-year plan period, it is necessary to establish and improve the tax system that is conducive to high-quality development, social equity and market unification, optimize the tax structure, and improve the efficiency of tax collection and administration.
we will improve the local tax system and cultivate local tax sources. we will improve the local tax system, cultivate the main types of local taxes, rationally allocate local tax rights, and straighten out the relationship between taxes and fees. in accordance with the reform plan on the division of revenue between the central and local governments, we will move forward with the collection of consumption tax later and steadily lower the level of local governments. we will carry out coordinated research on the reform in the light of the consumption tax legislation. under the premise of unified central legislation and tax collection power, we will appropriately expand the jurisdiction of provincial tax administration through legislative authorization. we will carry out non-tax revenue reform in a coordinated way.
we will improve the direct tax system and gradually increase the proportion of direct taxes. we will improve the direct tax system, with income and property taxes as the mainstay, and gradually increase their share in tax revenue. we will further improve the individual income tax system that combines comprehensive income tax with classified income tax. we will carry out timely reform and revision of the individual income tax law, reasonably expand the scope of income that is included in comprehensive taxation, improve special additional deductions, and improve the policy system for attracting high-end overseas talent. in accordance with the principle of "giving priority to legislation, fully delegating power and advancing step by step", we will actively yet prudently advance legislation and reform of real estate tax. establish and improve personal income and property information systems.
we will deepen reform of the tax collection and management system. we will adhere to the principle of governing tax in accordance with the law, and make government tax revenue and non-tax revenue more standardized, coordinated, and governed by law. we will establish a standardized and unified system for collection and administration that is clear about rights and responsibilities. we will work step by step to build a new generation of national unified and intelligent electronic taxation bureau, build a national information database of unified standards and centralized data, and continue to build a platform for sharing tax-related information to facilitate information sharing among all departments.
we will further improve the government debt management system and the standardized, safe and efficient financing mechanism for government debt
government debt management system is an important part of modern fiscal and taxation system. during the 14th five-year plan period, we need to further improve the government debt management system, give full play to the positive role of government debt financing, and resolutely guard against and defuse risks to enhance fiscal sustainability.
we will improve the system and mechanism for managing government debt. according to the need of counter-cyclical adjustment of fiscal policy and the requirement of fiscal sustainability, the scale of government debt should be reasonably determined. we will establish, in accordance with the law, a financing mechanism for local governments to borrow money that has standardized management, clear responsibilities, openness and transparency, and controllable risks. we will improve the mechanism for determining local government debt ceilings, match general debt ceilings with revenue from general public budgets such as taxes, and match specific debt ceilings with revenue from government-managed funds and project revenues. we will improve the index system for assessing the risk of local government debt, which is dominated by the debt ratio, and improve the mechanism for assessing the solvency of local governments. we will strengthen the application of risk assessment and early warning results to effectively move forward risk prevention and control gateways.
to prevent and defuse hidden debt risks of local governments. we will improve the mechanism for regular monitoring and control, and will never allow new projects or new projects to be built by adding hidden debts. we will tighten budgetary constraints, comprehensively strengthen the demonstration of the fiscal affordability of projects and the review of budgets, and bring all government expenditures under budgetary management in accordance with the law. we will strengthen oversight over state-owned enterprises and public institutions, improve the mechanism for local governments and their departments to allocate funds to enterprises and public institutions in accordance with the law, and prohibit local governments from increasing hidden debts in the form of corporate debts. development and policy-based financial institutions must operate in a prudent and compliant manner, and it is strictly prohibited to provide financing to local governments in violation of regulations or to cooperate with local governments in making loans in disguised form. we will clean up and standardize local financing platform companies and divest them of government financing functions. we will improve a market-based and law-based debt default resolution mechanism and resolutely prevent the accumulation of risks from forming systemic risks. we will strengthen oversight, auditing, and accountability, and strictly implement the system of lifelong accountability for government debt and the mechanism for backward review of government debt.
we will improve the mechanism for managing the issuance of government bonds. we will improve the variety and maturity structures of national and local government bonds. we will continue to promote the healthy development and opening up of the treasury bond market, improve the yield curve of government bonds that reflects the supply and demand of the market in a timely manner, and give better play to the role of market benchmark pricing of treasury bond interest rates. we will improve the mechanism for disclosing government debt information and promote the formation of a market-based and law-based mechanism for financing self-discipline.
source: ministry of finance, prc