On Legislation Of Transfer Payment From The Exchequer

Since China’s launch of the tax distribution system reform in 1994, the establishment the system of transfer payment from the exchequer has played an important role in improving the macroeconomic regulation and control capability of the central government, and promoting rapid, sustainable and sound economic development. However, there has not yet been any special law for transfer payment from the exchequer.The newly-amended Budget Law of the People’s Republic of China is the highest legal hierarchy which mentions transfer payment from the exchequer. This leads to some problems in real-world applicability of domestic fiscal transfer mainly including low-level legislation, unreasonable configuration of legislation, unclear boundaries between government and market, unclear separation between governments’powers of finance and administration and expenditure responsibilities, the gap and deviation between Fiscal Transfer Payment Law’s value and Philosophy and existing policies’designs and implementations. Combined foreign experience with domestic situation, to perfect Fiscal Transfer Payment Law should start with the following aspects:reasonably partitioning and legalizing the financial and administrative powers of governments at all levels, for it is the premise to establish finance transfer payment system, elevating the legislation level of Fiscal Transfer Payment Law, making Governments’Fiscal Transfer Payment Law to seek balance and equality, paying enough attention to incentive indicators, strengthening procedure guarantee of governments’fiscal transfer, coming up with rules for implementation of budget act as soon as possible, hardening budget constraint, establishing practical supervision system and accountability mechanisms and putting fiscal transfer payment on the right track of standardization and legislation.