A Study On The Division Of Tax Power Etween Central And Local Governments In China

That the growth rate of tax revenues has dropped drastically under the new normal economic conditions and meanwhile China's economic development goal is to change from "quantity" to "quality" to which add the dilemma of local governments falling into fiscal risks and boosting people's livelihood expenditures is the background of this research.In this paper,tax power has been divided into tax legislative power,tax revenue ownership,and tax collection and management power.According to the research order of theoretical basis,historical review,current status investigation,adverse consequences,and cause analysis,it can be concluded that the existing taxation division model in China will lead to the fiscal dilemma within the local government budget and the dilemma of the central government tax centralization,and promote the extensive economic growth model and non-compliance of local governments.The unfavorable consequences are due to the failure to build a relationship between tax division with duty and expenditure division,the incomplete implementation of the tax-sharing system,the incompatibility of the sharing tax,and the imperfection of the fiscal and taxation ecosystem.Based on the Western taxation theory,historical experience,status quo and problems of China's taxation power division,with reference to the selected BRICS countries,the guiding principles for the division of taxation power between the central and local governments in China are put forward:Tax power division must match the division of duty and expenditure responsibilities which are reasonably divided and already matched;The statutory division of taxation power must be regulated and reflect the combination of centralization and decentralization,tax attributes and government functions,and the combination of efficiency and fairness.It is necessary to first meet the preconditions for the reform of taxation power division by standardizing the relevant legislation,law enforcement,and judiciary,clarifying the public goods and services offered between the central and local governments and their expenditure responsibilities,matching them to tax power division,optimizing the structure of the tax system,and establishing a modern taxation system;Then,granting local government right to legislate on tax.As for the tax ownership,establishing the main types of local tax will both further increase the ownership of the central tax revenue as well as standardize the division of it;to solve the contradictions between vertical and horizontal governments by establishing third-party coordination agencies and signing agreements;Finally,to propose measures to improve the inter-provincial and inter-governmental tax relations.