From the beginning of 1990 to the end of 1996, I worked in the Ministry of Finance, and successively served as deputy director of the department of fiscal and taxation system reform and director of the department of tax administration, and directly participated in the whole process of the reform of the distribution relationship between the state and enterprises, the reform of the industrial and commercial tax system and the reform of the tax-sharing financial system in 1994. Among them, the tax-sharing reform is particularly important to enhance the country's financial strength and macro-control ability. In the context of the current government's response to the crisis, the past of this reform is particularly memorable.
Reasons for tax sharing
From the Third Plenary Session of the Eleventh Central Committee of the Party to 1992, in order to meet the needs of economic system transition, two contract systems were formed with decentralization, profit-making and invigorating of local and enterprises as the main line. First, the enterprise contract system and the reform of the distribution relationship between the state and enterprises; The second is the financial contract responsibility system and the reform of the distribution relationship between the central and local governments.
The fiscal contract system of decentralization and profit-making by the state has expanded local power, increased local financial resources and stimulated local enthusiasm for economic development, which has played a positive role under the economic and social conditions in the early stage of reform. At the same time, there are also negative effects: first, it is irregular and unstable; Second, it has excessively strengthened local interests, formed regional market segmentation, hindered the formation of a unified national market, and affected the economic structure and development; Third, the "two proportions" are declining-due to the excessive autonomy of local tax reduction and exemption policies and the negative role of enterprise contract system, the proportion of fiscal revenue to GDP is declining year by year; In terms of incremental income distribution, there are more places and fewer central governments, and the proportion of the central government in the national fiscal revenue is getting lower and lower, which seriously weakens the central government's macro-control ability.
From the end of 1980s to the beginning of 1990s, the central government had to "borrow money" from local finance for many times. Wang Bingqian, then Minister of Finance, said, "I'm so poor now that I have only vests and underpants left"; 1992, Liu Zhongli, who took office after him, said, "I don't even have a vest, only shorts." 1993, Zhu Ji, then executive deputy prime minister of the State Council, said to Liu Zhongli, You are really short of money! During this period, the state carried out a pilot reform of the "tax-sharing" financial system in a few regions and enterprises, but it was not generally recognized by all sectors of society.
1992 In the spring, Comrade Deng Xiaoping's southern tour sounded the horn of a new round of economic system reform. In the autumn of that year, the 14th National Congress of the Communist Party of China was held. In view of the reform of the fiscal and taxation system, two main lines were put forward, namely, "giving overall consideration to the interests of the state, the collective and the individual, and rationalizing the distribution relationship between the state and enterprises, and between the central and local governments", and the corresponding solutions were pointed out, namely, "gradually implementing the" tax-benefit diversion "and tax-sharing system", and the direction and tasks of fiscal and taxation reform were clarified.
What is tax sharing?
Tax-sharing reform, in a narrow sense, is the fiscal tax-sharing system between the central and local governments, and in a broad sense, it is a reform to straighten out the distribution relationship between the central and local governments, including tax-sharing system and transfer payment system, and it is a system to solve the financial distribution relationship between governments at all levels.
The guiding ideology of tax-sharing reform is: correctly handle the distribution relationship between the central and local governments, mobilize two enthusiasm, and promote the reasonable growth of national fiscal revenue; Reasonably adjust the distribution of financial resources between regions; Adhere to the principle of combining unified policies with hierarchical management; Adhere to the principle of combining overall design with gradual advancement.
The specific content of the tax-sharing reform can be summarized in six words: "decentralization, tax sharing and agency separation" and "return, linkage and transfer payment". The first three are the main contents of the reform and the last three are auxiliary measures.
"Decentralization" means dividing and defining the powers of the central and local governments and determining the scope of fiscal expenditure accordingly.
"Tax-sharing" means dividing their respective fiscal revenue ranges according to tax types, and dividing all taxes into central taxes, local taxes and taxes enjoyed by the central and local governments.
The "sub-agency" system is to divide the original set of tax agencies into two sets of tax agencies, national tax and local tax, which are responsible for collecting central revenue and local revenue respectively, and establish a relatively independent local fiscal and taxation work system.
The purpose of "return" after tax is to realize the principle of "saving the amount and adjusting the increment" in the reform plan and ensure the local vested financial resources. After the implementation of the "tax sharing" method, 1993, all the consumption tax and 75% of the value-added tax drawn by the central government from the local government will be returned to the local government in full, which will be used as the base for the central government to return tax to the local government in the future.
The function of the coefficient "linking" is to make the tax refund from the central government to the local government and the growth of the "two taxes" (value-added tax and consumption tax) obtained by the central government in the same direction out of sync. It will not only increase the "return" of local taxes, but also gradually increase the proportion of central revenue to fiscal revenue. After 1994, the amount of tax refund increased year by year on the basis of 1993, and the increasing rate was determined by the coefficient of 0.3% for the average increase of national value-added tax and consumption tax.
"Transfer payment" is an important safeguard measure to ensure the success of tax-sharing reform. The central government has continuously increased the transfer payment to backward areas through the centralized financial resources of tax sharing system, which can alleviate the imbalance of regional economic and social development and promote the coordinated development between regions and the harmony and stability of the Chinese nation.
Create a "hook"
Among the three auxiliary measures of tax-sharing system, "linking" is a creation. How did it come up? There's a little story here.
At the beginning of August of 1993, Liu Zhongli, Xiang Huaicheng, Xie Xuren, Jiang Yonghua and I, as well as one or two young men from the local budget department, studied the tax-sharing scheme together. Everyone thought that the tax rebate should increase, so the problem focused on how to determine the growth amount of tax rebate.
In the 1980s, when the financial contract system was implemented, the central government implemented a financial subsidy policy of10% for ethnic minority areas. After several years, because the annual growth rate of central government revenue was only about 5%, it was unbearable, so it was cancelled and became a fixed subsidy. In this regard, ethnic minority areas have great opinions and ask the central authorities to make adjustments and restore the method of increasing subsidies. But at that time, the Ministry of Finance had not found a solution to this contradiction and dragged it down. This is the same question as whether the "return" encountered in the design of tax-sharing system is fixed and "dead", or whether it is growth and "prosperity".
How to solve this problem? I put forward a method of "linking" and drew a schematic diagram on the blackboard. Its core is to link the growth rate of local "tax return" with the growth rate of the central "two taxes", control the growth rate of local "tax return" below the growth rate of the central "two taxes" and determine a coefficient. During the discussion, it was suggested that it could be linked to the growth rate of "two taxes" in the central government, or to the growth rate of "two taxes" or other indicators in the country. As for the specific coefficient, the initial proposal was1:0.5, and the Ministry of Finance put forward1:0.3 when reporting to the meeting. After discussion, the meeting finally decided on1:0.3.
This method is not unusual at first glance, but after careful calculation, it will be found that the proportion of the increment returned to the place in the total increment is decreasing year by year. This is not only because the two growth rates are one big and one small, but also because the two denominators are the same except for the first year, but they are different in the future, and the size difference is constantly expanding. The technical method of "coefficient linking" has solved the problem that the tax return in the design of the tax-sharing scheme must meet four constraints at the same time, such as "tax sharing", "fixed stock", "prosperity for both sides" and the increasing proportion of the central government.
Cardinal game
1After the Central Standing Committee passed the fiscal and taxation reform plan on September 3, 992, the information spread quickly, and some places reacted strongly, mainly for the tax-sharing plan, which was considered to be "tight" and had some resistance. Comrade Ji, who is in charge of this reform, made a decisive decision and immediately led the responsible comrades of the relevant departments of the central government to go to local areas to talk with local party and government officials, publicize the significance of the reform, explain the reform plan, listen to opinions, and improve it.
During the 74-day period from1September 9, 1993 to1February 2 1 day, Comrade Ji personally led the team and visited Hainan, Guangdong (Guangzhou, Shenzhen), Xinjiang, Liaoning (Shenyang, Dalian), Shandong (Qingdao) and Shandong in ten stops. The most crucial stop is Guangdong.
Guangdong's fiscal responsibility system has been operating vigorously and has a great effect on the local economy, so it is difficult to understand the tax-sharing system. In the first two days, they explicitly asked to continue to implement the contract system. After repeated doubts and doubts, they began to seriously consider it, but they put forward two requirements: first, the base number, the plan is based on 1992, and Guangdong Province proposed to use 1993 as the base number. The main reason is that 1993 has a rapid economic and financial growth in the province, which is in line with the central government. Second, I hope that after the original tax reduction or exemption policy for enterprises is retained for several years or cancelled, the increased tax will not participate in the system distribution for several years and stay in the local area. The latter request made concessions from Beijing and agreed to leave it to the local authorities within five years. The most controversial issue is the cardinal number. Minister Liu Zhongli and our working people (Xie Xuren, Jiang Yonghua, etc.) do not agree to take 1993 as the cardinal number. The main reason is that the finance has never taken and cannot take the figures that have not happened as the cardinal number, and they are worried that local people will resort to fraud in figures, which will lead to great irregularities.
In order to alleviate the contradiction, I suggested that even if 1993 is used as the base, it should be converted into annual data according to the actual situation of 1993 1 month-September.
However, in order to win the local support for the reform to the greatest extent, Comrade Ji agreed to the request of Guangdong Province, taking the income of 1993 as the base.
After determining 1993 as the base, it brought about a "game" between local governments and the central government in the last four months of 1993 and the base of 1994. In the last four months of 1993, local fiscal revenue rose sharply, increasing by about 60%, 90%,110% and150% respectively over the same period of last year, which led to an increase of more than 50% in local tax revenue for the whole year. 1994 1 month, the tax revenue increased by 60% year-on-year, and the year-on-year growth rate continued to decline in the following months.
In order to prevent the negative growth of tax revenue throughout the year, the Ministry of Finance convened an emergency meeting in the spring of 1993 to study countermeasures. Between 1993 "checking the base to squeeze water" and adopting Comrade Weng Lihua's "looking forward with one heart and one mind", the latter was finally chosen. It is determined that one-third of the increase of "two taxes" in each province 1993 is the growth target of "two taxes" in this province 1994, and the base of incomplete deduction will be returned, and the completed one will be returned normally at1:0.3, and the excess one will be returned at1:0.6. With this extraordinary wisdom, the financial system has eased the sequela of the "extraordinary base" created by itself.
There is no end to reform
1993 1 February 25th, the State Council finally issued the "Decision on Implementing the Financial Management System of Tax Sharing", which was implemented nationwide from 1994 1 month1day.
From 1993 to 2007, the national fiscal revenue increased by 10.8 times, with an average annual growth rate of19.3%; The proportion of national fiscal revenue in GDP has also increased from12.3% in 1993 to 20.6%, greatly enhancing the financial strength of the country. At the same time, the central government's regulation and control ability has improved significantly, and the proportion of central fiscal revenue in the national fiscal revenue has increased from 22% in 1993 to 54.1%in 2007. The rapid growth of financial transfer payments from the central government to local governments has provided strong support for the central government to adjust the interest gap between regions. In 2007, 37% of the local expenditures at the national level, including 54% in the central and western regions, came from the transfer payment of the central government, ending the history of "borrowing money" from the central government.
At present, new reforms such as reforming the fiscal tax-sharing system among governments below the provincial level and improving the local income system are all in the pipeline.
There is no end to practice, reform and innovation, and the reform of fiscal and taxation system will continue to accompany and promote the scientific, healthy and sustainable development of China's social economy. ■