Research On Optimization Of The Taxation Distribution Between The Central And Local Government In China

The relation of taxation between the central and local government is a very important matter in the tax share system, which established in 1994. The constitution of that fiscal system is a landmark reformation compare to the original one .The tax share system deals with the fiscal distribution between the central and local government and inter-local governments based on the principle of market-economy and the public finance theory. Under the revenue system, the relation of finance distribution is standardized and the finance right between the governments is unambiguous, thus ensure the achievement of business right and full working of the function of the governments. The taxation distribution between different governments plays an important role in taxation's theories and practices in China, it will directly affect the finance balance between the governments of different levels, the stability of the macro-economy, the quality and quantity of the public products or services and the equilibrium of the economy development between different areas and so on. This paper deals with the taxation conditions of the relationship between central & local government and tries to go further research on the base of the achievements gotten from the research we have done. The author thinks the effort will be valuable both on theory and practice.The relation between the central and local taxation is not brought into the theory of western tax system optimization, and Chinese scholars pay more importance to the taxation distribution but seldom link it with the theory of tax system optimization. The author tries to put the two aspects together to go further research on the present conditions and reasons after analysis the activities and incentive of the central &local governments.The theory of the relation of taxation between the central and local government is complex and extensive in range, the author specifies it into three points: the distribution of the tax income, the category of tax configuration, and the division of the taxation right, the relationship of which is: the taxation right is most important, it decides the other two; the distribution of tax income and the configuration of tax category is of the equal level, the latter is one of the showing form of the former.This thesis is composed of five parts. In Part 1, the theory of tax system optimization of the relation of taxation between the central and local government is analyzed. In part 2 the author tries to figure out the present conditions and main problem of the tax income distribution between deferent governments in China. In this part, many data and indexes are used in order to discuss it clearly. In part 3 the author pay importance to discuss the conditions and problem of the tax right division in China. In part 4, using the foreign tax share system reformation practice for reference, the general direction of the revenue system reformation is pointed out. In the last part of whole thesis, the author put forward some specific countermeasures and suggestions of how to optimize the taxation distribution in China.