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Background and impact of local tax administration reform

Author: ZhongZuo From: www.yourpaper.net Posted: 2010-06-16 20:09:47 Read:
[Paper Keywords] local tax system of tax administration system of local government
[abstract] China will be the main reason for the reform of the tax administration system, local government violations of tax relief is very common, and the lack of local main taxes, which led to the local governments depend too much on non-tax revenue . Reform of the tax administration system will be the policy of the local government to attract foreign investment in China, the source of income of the local government, as well as the establishment of the local tax system, an important impact on local government to regulate the economy.
the background of China's reform of the tax administration system analysis
At present, China carried out the reform of the tax administration system, major background factors following two aspects.
(A) increasing local government violations of tax relief
Currently, around at all costs in order to attract foreign investment, have given to foreign various preferential policies, especially tax incentives. According to our current tax administration system, other than expressly authorized in addition to the central government, local governments at all levels are not entitled to formulate tax relief policy. However, the reality is that the local government to attract foreign investment, ultra vires to develop a variety of tax relief "local policies", including a pre-tax exemptions and concessions and tax after tax return, that is refunded, in after taxes apologized storage, financial "refunding the tax return to the enterprise. Because some taxes to the central, local shared taxes, local if unauthorized waiver is in effect deprive central income. National Tax Administration Development Zone tax preferential policies had in 2004 conducted a large-scale inspection, found 2,527 development zones in the country uncovered a total of more than 1,000 corporate existence region registration, operating outside the district, nearly all checked enterprises half. The inspection also found that expanding tax incentives Scope improve promotions proportion, to extend the preferential period, illegal tax breaks and other issues. Violations enterprises amounted to 4.3 billion to pay less tax. The tax authorities also clean out the place that does not comply with the tax law violations of tax-related documents 88. (4) State Administration of Taxation announced "to carry out the announcement of the tax relief policy implementation survey activities, the tax department is responsible for the collection and management of a variety of tax relief for investigation. Such a large-scale survey reflect attaches great importance to the State Administration of Taxation on the current tax relief and local government violation tax relief, which is what led to places vicious competition, has been a serious impediment to the rational allocation of resources as well as the area of ??China's economic development coordination.
(B) where the lack of the main taxes, local governments depend too much on non-tax
In taxes to the local tax system are numerous, but has a decisive influence on the lack of local financial resources and long-term stable tax sources of tax revenue the zero halo dispersed, restricted by many factors, sources of revenue potential. End of the legislative power of the local taxes make concentrated in central and local government tax administration privileges small and below the provincial level the Government does not have the legislative power of the local taxes, the local government can not be opened according to the local public spending needs and the characteristics of the local area taxes to raise revenue, local government revenue too small dependence on people tax, local tax revenues far failed to meet the needs of the local financial support f "increasingly dependent on a variety of extra-budgetary revenue and debt income to the sea, for example, the rapid development of Shanghai urban construction, look .. new exclusive , but no Funding for the project is a huge the existing budget revenue is just a drop in the bucket. Shanghai Municipal Government in the last century, eight, nine} years mainly rely on state-owned land resource income, directly or indirectly, debt and stimulate social capital through government credit involved in urban construction and other methods to raise the huge amount of urban construction funds from the time of the start of the decade of the last century, the mid 9o Shanghai through land leasing, the total funding of more than 1,000 billion yuan land resources is the great wealth of the hands of the government, thus became the main source of income for local government. addition, although the debt is foreign local government revenue, but because of China prohibit local governments to issue bonds, a large number of local government through its investment companies to issue corporate bonds and provide guarantees in order to obtain funds for the construction of cities such as Shanghai city, district (county) each of the two levels of government set up many of the government investment company, as its financing body, for example, municipal the ten investment company, district (county) government have, ranging from 2 to 5 of the investment company, some companies did not profit, some simply is borrowing company, they engage in leveraged investments, with its government background, most of the final debt must be made by the local financial burden, which is the local government with to greater financial risk.
, China's reform of the tax administration system of local government
Around different geographical features, but the reform of the tax administration system in the following four aspects of the local government have a greater impact.
(A) the policies adopted by the local government investment will be diversified
Through reform of the tax administration system, the central government will strengthen management over the central and shared taxes on corporate income tax and VAT, but the lack of local main taxes, smaller impact on enterprises, the local government is the best to take advantage of the introduction of foreign capital The preferential tax policies will be very limited. Moreover, the central government will gradually reduce local tax incentives, and around the regional tax competitive factors will be greatly weakened. Central once given more preferential tax policies in the eastern coastal areas, the policy advantages are obvious, largely contributed to the strength and effectiveness of its investment. Reform of the tax administration system, in order to keep the region competitive advantage to accelerate the pace of investment, promote local economic development around the need to change too in the past relied on tax relief policies single, then there harmful tax competition. Local governments will be more to improve the investment environment, local competitive industries policy support staff, and continue to optimize its industrial structure to maintain the competitive advantage of the local. Eastern coastal areas in order to maintain its strong economic growth and regional advantages, should rely solely on tax cuts and efforts to improve the investment environment and the level of government services with the local government's financial strength, and change the past, all foreign-funded enterprises blindly offer concessions practices, the establishment of a special fund, consistent with the direction of the development of local industry enterprises, as well as high-tech and modern service enterprises to give support to effectively introduce funds, promote industrial restructuring, promoting regional economic development.
(B) local government revenue sources will be standardized
Local government primarily through three sources income, income taxes, the state-owned resources and borrowing. They have their own characteristics: land resources could bring enormous wealth for the government, but in the land use right transfer, monitoring costs, high transaction costs, it is difficult to transactions conducted in a fair and transparent market, and this will affect the government has been in financial normative and the image of the government. The debt is an important way to raise funds for the benefit of future generations of urban infrastructure projects, foreign local government revenue in line with the principles of efficiency and fairness. However, a large number of local governments in China through its investment companies to issue corporate bonds to raise funds for construction of these enterprises and the government is very vague definition of the relationship of the responsibilities, rights and interests, maturity can not pay when the debt financing of these enterprises when you will find out all kinds of reasons to rely on the government to repay the debt, resulting in a lack of hard constraints on the mobilization and use of debt capital, while the government has created an enormous debt risk. Tax based on the law as the basis for a more transparent, predictable, can regulate the source of government revenue, reflecting the principle of public finance.
After the reform of the tax administration system, when the local main taxes has not yet been established, the land resource revenues will continue to be an important source of revenue of the local government, as long as the government to optimize the local investment environment, improve the construction of infrastructure and public services, increase the intensity of investment, Real estate appreciation, you can promote the huge fiscal revenue. But in the long run, the local government will increase the local tax administration rights and creation of new taxes, according to the needs of the public spending and regional characteristics, accelerate the cultivation of local main taxes in taxes to raise the necessary funds for the public welfare, infrastructure facilities and public services, so that the increase in the proportion of tax revenue in government revenue, so that the government earn more transparent, more determined and more standardized.
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