System Of Tax Distribution On Local Fiscal System From The Vision Of Province-Governing-County Fiscal System

The12th five-year plan, speeding up the reform of fiscal and tax system, is the guide of our next five years’reforming of fiscal system. It clearly pointed out that we should follow the principle that how much money you get should match to how many things you do. And we have to rationalize the fiscal relations between different levels of government in order to perfect the System of tax distribution. This section also clearly states to carry forward the Province-Governing-County Fiscal System steadily, to strengthen county-level fiscal power, making sure that county-level finance have the ability to meet people’s demand for public services.This paper discussed the history of china’s fiscal system, analyzed the beginning of the System of tax distribution and the factors of tax distribution in the past. At last I got a conclusion that using the System of tax distribution is a natural choice. It matches our condition.The reform of the System of tax distribution in1994standard the fiscal relation between the central government and local government, defined the distribution of fiscal rights. But how to carry out the system inside a province is not mentioned. That is why our reform is not complete, and it is the way we try to perfect the system. I believed that the reform have got very huge achievements, and achieved its aim. Although the results were outstanding, but the reform was restricted by the history condition, it was not complete. The biggest problem is we don’t know how to carry out the System of tax distribution inside a province, the local government’s financial condition is very bad, local debt is very large. Grass-roots finance has so much pressure. The experts agree that the way to solve these problems is setting up a standard of the tax distribution system inside a province.After18years of reforming, the revenue of the government is increasing rapidly. In2010it is over1.8billion. The financial problem of the central government has been solved. Follow the direction of central govemment, many provinces have started the Province-Goveming-County Fiscal System.. It can reduce the fiscal levels, raise the efficiency of fiscal management, expand the fiscal rights of basic level government. The reform can solve the financial problem of local government, because the system of tax distribution get the revenue upwards. The practice in many provinces shows that the system can solve the financial problem, the local government can provide better public service, in order to have all the Chinese to enjoy the results of our development.Sichuan province start the reform of expanding and strengthening counties’power in2007, the most important part of it is carrying out the Province-Governing-County Fiscal System. The new system has been using for4years, and more than50counties have start the reform. What is the condition of the experimental counties, how is the fiscal operation. This paper will discuss all the issues.