Research On Taxation Powers' Division In China

Taxation powers'division is the core of tax sharing system. The 1994's reform defined the guiding ideology of unifying the law, equalizing the burden, simplifying the system and rationalizing the division and thus bettered the fiscal relations between central and local government. However, so far as we see, the reform carried on the majority of its former mechanism. As a result, this transitional tax system still has lots of problems with legislation, enforcement and distribution of tax as well. The continuously perfected tax sharing system has been presenting issues to the mechanism of taxation powers'division. The most prominent issue is the disparity between financial and managerial power. All these non-standard and unreasonable division problems between central and local government tends to be a bottleneck which is now affecting the effect of tax function.Based on this, this article is divided into five parts.Part 1:This part introduces relative theories at home and abroad about taxation powers'division.Part 2:Taking Shandong Province for example, this part analyses provincial finance with respect to local financial revenue scale and items as well as local extra-budgetary revenue and budgetary classes.Part 3:On the basis of current local situation, this part carries on empirical analysis to find out underlying causes of these problems. The analysis bring us to the conclusion that provincial taxation has been gradually impaired while its response sensitivity to economy has become somehow weaker and thus the local dependence on central transfer payment has been increasing year after year as a result.Part 4:As independent benefit individuals, the central and local government game on the issue of tax powers'division with each other. At the same time, to attract more tax sources to its region, between local governments there also exist games. The conclusion suggests that the share ratio of common tax, transfer payment system, as well as the competition between local governments are all important factors that relate to the tax powers'division.Part 5:Last but not least, acquiring other countries'experience, this article builds a frame for tax powers'division and offers some suggestions on perfecting our tax share system from the angle of legislative, enforcement as well as distributive power.