Research On The Effects Of Tax Sharing Fiscal System Reform For 20 Years Brought To Xinjiang’s Society And Economy

In 1994, China implemented the tax sharing fiscal system reform. It largely solved the financial distribution relationship between the central government and the local provincial governments. What’s more, the central government’s financial strength and the economic and social macro-control capacity were improved in a large part. However, with the continuous development of economy and society, present tax sharing fiscal system has not adapted to the needs of economic and social developments. Under the tax sharing fiscal system, the central government acquires 75 percent of the value added tax revenue and local governments have less fiscal revenue. Developed regions have sufficient tax income and retained tax revenue are enough,so they can perform fiscal expenditure responsibility better and depend weakly on the central transfer payments and have strong fiscal self-supporting ability. But less developed areas have less retained income than developed areas and have insufficient fiscal self-supporting ability and heavily rely on the central transfer payments. Different regions have great differences in development level and the influences affected by the tax sharing fiscal system are also different.So the tax sharing fiscal system reform still remains some problems to deal with.Xinjiang lies the northwest frontier of the motherland and it’s a mutil-national gathering area.Because the situation of those countries border to Xinjiang is not safe,Xinjiang is confronted with great pressure of striking against terrorism and maintaining steady. Xinjiang has lower economic development level than developed areas and is lack of fiscal revenue.But Xinjiang undertakes a lot of responsibilities and faces giant pressure of fiscal expenditure,so Xinjiang heavily relies on the central transfer payments.Since 19 provinces and cities specially supporting Xinjiang, Xinjiang has got more and more support and put more money into livelihood field.But there still is prominent development gap between Xinjiang and middle-eastern regions. The tax sharing fiscal system reform doesn’t solve the problem of development imbalance among different areas.Under the strategy of Silk Road Economic Belt and 21 st Century Sea Silk Road,as the core region of Silk Road Economic Belt,fiscal expenditure scale in Xinjiang will constantly expand and fiscal expenditure pressure will increase quickly to improve all kinds of infrastructure.Based on the above consideration, this paper is divided into five parts to deeply analyzes the effects of tax sharing fiscal system reform for 20 years brought to Xinjiang’s society and economy.The first part briefly describes the research background, significance, method, framework, focus and innovation point.The second part describes the background of tax sharing fiscal system reform and operation condition.The third part deeply analyzes the effects of tax sharing fiscal system reform for 20 years brought to Xinjiang’s society and economy through empirical methods.I conclude that the central transfer payments make a significant contribution to Xinjiang’s economy and education,medical and social security expenditure play a positive role in narrowing income gap and consumption gap between urban and rural residents in Xinjiang.The fourth part introduces the existing problems and challenges in the operation of tax sharing fiscal system in Xinjian.This part mainly discusses mismatching of fiscal power and fiscal expenditure duty,unreasonable structure of longitudinal transfer payments and new challenges.The fifth part puts forward some policies and suggestions on optimizing fiscal and taxation systems in Xinjiang according to conclusions from the empirical analysis and the existing problems and challenges in the operation of tax sharing fiscal system.