Government Revenue Mechanism Of Public Finance Framework

To establish a public financial framework tailored to the needs of market economy is, and will continue to be for certain period, a fundamental task in further reform of our financial system as well as financial operation system. A standardized government revenue mechanism plays an important role in this framework.In developed market economy, the state government' s revenue mechanism is characterized by a high level of level of legalization in the decision making process, tax as the main form of revenue and implementation of a standard revenue sharing system(i.e. sharing taxes between local and central authorities ). The government revenue mechanism in our country, on the other hand, has evolved from state-monopolized revenue and expenditure, decentralized financial resources to clean up and rectification. The outstanding problems in this area begin to be curbed and the goal for development is further defined. However, such mechanism is obviously transitory and of dual nature. Quite a few problems are yet to be solved, including the low level of legalization in decision-making process, the irregular forms of revenue, the rather irrational distribution of revenue between governmental agencies. Such a mechanism can' t fully address the needs of public finance.Therefore, we must proceed from our national conditions whilelearning from lessons of developed market economies, and explore to establish a government revenue mechanism fully adapted to public finance in the country. The new mechanism should be based on laws and regulations and its main features include: tax as the major source of government revenue; budgeting of all government revenues and expenditures; a well-regulated revenue distribution system between governmental agencies. For this purpose, we shall redouble our efforts in implementing the following measures:1) push forward the legal development of government revenue;2)accelerate the taxation reform and adjust the relations between tax and fees;3)improve the legal system and reinforce the dominant position of tax in government revenue;4)further improve tax-sharing system, rationalize the revenue distribution between government agencies and give full play to the initiatives at both the central and the local level.