A Study On Fiscal Transfer Payment Legal System

Fiscal transfer payment is a significant part of Tax Distribution System. According tothe principle of fiscal-administrative authority matching, governments have relevantfiscal power, on the foundation of certain administrative authority. However, differentsocial developments lead to the gaps of government receipts, which become the cause ofunbalanced public service power. So, fiscal transfer payment is of necessity. Fiscaltransfer payment is the movement of financial fund between governments at differentlevels or at the same level. Arrangement of fiscal transfer payment system should baseon the matching of the governmental fiscal power and administrative authority. Thereare two targets can be discovered in fiscal transfer payment, the direct one achievingfiscal equality, the ultimate one achieving public service equality. Substantively, the lawof fiscal transfer payment is the legal restriction on the payment of financial fund ofgovernment, regulating governmental public fiscal expenditure power, securingfundamental civil rights, achieving social fairness and justice, through constitution andother law. Nomocracy of fiscal transfer payment is pursuit of financial systemconstruction. It involves two meanings: one is to execute the law effectively and theother is that the law itself should be appropriate and just. The fundamental principles offiscal transfer payment law contain the principle of democracy, the principle ofdecentralization and the principle of equal public service. The fiscal transfer paymentlegal relationship also contains elements like “subject”,“object” and “content” as usual.Currently, the scales of Chinese fiscal transfer payment are rather huge. On the contrary,relevant legislation lags behind. There is no transfer payment special law. Neither, thereis no regulation on transfer payment in1994’s budget law. The longitudinal transferpayment and the transverse transfer payment are both regulated by documents of theMinistry of Finance. The documents are rather massive and mixed.By investigating the fiscal transfer payment system of Australia, the USA, Germanyand Japan, it is not difficult to discover that fiscal transfer payment law is of necessity inmarket-economy legal system, aiming at resolving the problem of longitudinal andtransverse financial uneven. On diverse national conditions, the developmental patternsof fiscal transfer payment in countries are of diversity. The implementation effect offiscal transfer payment system need to be guaranteed by nomocracy, and besidessubstantive content, a serious of reasonable procedure is still needed. Fiscal transfer payment of China goes through three historical stages. It was foundedin1994’s Tax Distribution System Reform, and has been developing since then. In1998,public finance system construction was set up, and more steps on fiscal transferpayment system were required. Aiming at achieving equal basic public service, fiscaltransfer payment system is not “Slob-protection” system, taking both equalization andmotivation into consideration.In order to make sure that the special law reflects financial nomocracy andfairness-justice, such hard problems should be resolved at first: the relationship betweenfairness and efficiency, the coordination among five subjects, the improvement of theincentive and constraint mechanism and other relevant supporting measures. Accordingto the goal of public finance system construction, there are some suggestions to fiscaltransfer payment legal system. Firstly, the validity of rules should be improved. Fiscaltransfer payment should be taken under the regulation of constitution and budget law.And the special law and enforcement regulation should be made out when it isappropriate, containing the targets, basic principles, source of funds, legal form,accounting standards, distribution methods, supervision and administration and legalliability. Secondly, the items of transfer payment should be integrated. Thirdly, thecalculation standards should be improved to rule out artificial interference. Fourthly, thepayment system at the provincial level or below should be improved. Fifthly, thetransverse transfer payment system should be constructed and taken as the supplementof the longitudinal transfer payment. Sixthly, an independent, authoritativeintergovernmental transfer payment institution should be founded. Lastly, the procedureand supervision mechanism of fiscal transfer payment should be improved.