China will deepen its fiscal reform and accelerate the improvement of the public finance system, said Lou Jiwei, Chinese vice-minister of finance, on Friday.
Addressing the Forum of the World Economic Development and China on the sidelines of the World Economic Development Declaration Conference (WEDDC), Lou said in order to meet the target, the Chinese government will take concrete measures in the following six ways:
-- Improve fiscal macro-regulation so as to boost economic growth. The government has decided to keep the continuity of the proactive fiscal policy while properly adjusting the allocation structure and reducing the size of government investment in evidence of the gradual and rapid growth of private investment. The government investment will continue flowing into mega infrastructure projects such as Qinghai-Tibet Railway and water diversion from the south to north. Meanwhile, the investment will also be allocated to address the uneven growth of economy and society and disproportionate development of urban and rural economy;
-- Push forward the reform of the tax system. The major objective is to simplify the tax system, broaden tax bases, lower tax rates and improve tax collection. The government will continue reducing its tariff rates in the coming years in line with the tariff reduction commitment to the World Trade Organization. By 2005 the overall tax rate will drop to 10 percent as committed;
-- Press ahead with rural fee-to-tax reform. The government will gradually lower the agricultural tax rate, effectively alleviate the burden on farmers and work for a unified urban and rural tax system;
-- Continuously improve the tax-sharing system and transfer payment system, and institutionalize the fiscal relations at various governmental levels;
-- Adjust and improve the fiscal structure of expenditure and gradually define the expenditure scope of public finance. The government will allocate more resources to agriculture, science and technology, education, health, public security, social security, infrastructure, ecological conservation and other public areas; and
-- Improve and deepen reform of the fiscal management system and ensure safety, standardization and efficiency of public finance. Fiscal management must be equipped with high information technology to achieve fiscal modernization.
(China Daily November 8, 2003)
