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Minister of Finance: major overhaul in budgeting and taxation

11-21-2013 17:33 BJT Special Report: Third Plenary Session of the 18th CPC Central Committee |

By CCTV correspondent Laura Luo

Chinese Finance Minister Lou Jiwei says it's essential to improve the budget mechanism, and to establish a more fair and reasonable fiscal and tax system between the central government and local governments.

These are the top two items on the to-do-list of China's Finance Minister Lou Jiwei.

Improving budget scheme, and balancing fiscal and tax relationship between the central government and local coffers.

Tax revenue targets are expected to change as well. It was traditionally a fixed goal for local governments, but it will become more flexible, and based on tax income outlook estimation.

"One is to improve budget management mechanism, the other is the relationship between the central and local governments. There are problems in balanced budget scheme, including shortcomings in budgeting, reviewing, income and expenditure. There are even more problems lie in fiscal policies between central and local governments," Lou says.

Fiscal reform in China now bears bigger tasks. It is also expected to optimise economic structures, and upgrading industries. One important part is the on-going change from sales tax to value added tax.

"Sales tax to value-added tax is our current focus of the reform. We are transiting or expanding the value-added tax into services areas. We are going from production type VAT to value added tax for consumption," Lou says.

Lou also says that the government will impose heavier taxes on items that are harmful to the environment. He adds that the government will set up legislation on property tax.


 

Editor:James |Source: CCTV.com