Liu Kun, secretary of the leading party group and minister of the Ministry of Finance
The Central Economic work Conference held at the end of 2018 proposed that a proactive fiscal policy should increase efficiency and implement larger tax cuts and fees. Compared with previous years, the orientation of fiscal policy this year is still positive, but the intensity and focus of the policy are different, mainly reflected in "strengthening" and "improving efficiency". The main purpose of "strengthening" is to increase the intensity of tax cuts and expenses, focus on implementing larger-scale tax cuts, and promote more obvious fee reductions, so as to guide enterprises to anticipate and enhance market confidence, and better serve the development of the real economy. The main purpose of "improving efficiency" is to improve the efficiency and efficiency of the allocation of financial funds, make great efforts to invigorate the stock, make good use of increments, and further optimize the structure of financial expenditure. We will focus on supporting the three major battles, scientific and technological innovation, supply-side structural reform, the work of agriculture, rural areas and farmers, and ensuring and improving people's livelihood, so as to improve the performance of fiscal expenditure.
1. Why should we strengthen the effectiveness of the implementation of a positive fiscal policy
Judging from the situation at home and abroad, the world is facing great changes that have not occurred in a century, and profound and complex changes have taken place in the situation at home and abroad. However, from the perspective of the general trend, China's development is still in and will be in a period of important strategic opportunities for a long time. We must grasp the new connotation of important strategic opportunities and constantly enhance the comprehensive strength of our country. Recently, major international institutions have continuously lowered their world economic growth forecasts, macroeconomic policy orientations in major economies are also changing, and fiscal policy has expanded to cope with downward pressure on the economy. China adheres to the implementation of a positive fiscal policy and strengthens its efforts to improve efficiency, to hedge the instability of the external environment with the stability of the policy, and to hedge the uncertainty of the external environment with the certainty of the policy, so as to promote the stability of our economy. Firmly grasp the strategic initiative in the great changes in the world.
From the point of view of solving the main problems of development, the main contradiction restricting China's economic development is structural, and the main aspect of the contradiction is on the supply side. In recent years, we have paid attention to giving full play to the advantages of the fiscal policy regulation and control structure, adhered to the supply-side structural reform as the main line, and achieved remarkable results. At the same time, it should also be noted that China's supply system still does not adapt to the changes in demand structure, and it is difficult for the economy to achieve a virtuous circle. The implementation of a positive fiscal policy and efforts to improve efficiency, while stabilizing the overall demand, increasing support for supply-side structural reform, and promoting the solution of deep structural problems in economic development are conducive to strengthening the quality advantages of China's economy. We will continue to enhance the innovation and competitiveness of the economy and promote high-quality development.
From the perspective of building a well-off society in an all-round way, the consolidation of China's economic stability also needs active fiscal policy support. Over the past year, we have conscientiously implemented a proactive fiscal policy, increased tax cuts and fees, made up for shortcomings, and adjusted the structure, so as to keep the economic operation within a reasonable range. At the same time, it should also be noted that the real economy is still facing many difficulties, the risks in key areas can not be ignored, and the downward pressure on the economy is relatively great. To consolidate the overall stable and steady progress of China's economy, it is necessary to continue to implement a positive fiscal policy and improve efficiency, and further do a good job in stabilizing employment, finance, foreign trade, foreign investment, and expectations. We will go further on the journey of winning a decisive victory in building a well-off society in an all-round way.
Second, what kind of "gift package" have been given out for tax reduction and fee reduction?
Tax reduction and fee reduction is the key to dealing with the downward pressure on the economy, and it is also a major reform that benefits both the present and the long term. It plays an important role in lightening the burden of enterprises, stimulating the vitality of micro-main body, promoting industrial transformation and upgrading, and optimizing the distribution structure of national income. This year, the tax reduction and fee reduction policy is mainly tax reduction, with both inclusive tax reduction and structural tax reduction, focusing on reducing the tax burden of the manufacturing industry, which is the backbone of the national economy, and small and micro enterprises, which absorb the main force of employment. It mainly includes value-added tax reform, inclusive tax reduction for small and micro enterprises, special additional deduction for personal income tax, reduction of social security contributions, and so on. The landing of a policy of reducing taxes and fees has sent a "big gift package" to the masses of the people. For example:
In terms of value-added tax reform, with effect from April 1 this year, the current tax rate of 16% in manufacturing and other industries will be reduced to 13%, and the current tax rate of 10% in transportation, construction and other industries will be reduced to 9%, so as to ensure a marked reduction in the tax burden in major industries. The tax rate of 6% will remain unchanged, but through the adoption of supporting measures such as increasing tax credits for production and living services, we will ensure that the tax burden of all industries will only be reduced and not increased.
With regard to inclusive tax cuts for small and micro enterprises, with effect from 1 January this year, Small-scale VAT taxpayers whose monthly sales do not exceed 100000 yuan will be exempted from VAT, and the standards for small and low-profit enterprises that can enjoy preferential enterprise income tax will be greatly relaxed and the preferential efforts will be increased. The enterprise income tax reduction policy alone will benefit 17.98 million enterprises. It accounts for more than 95% of the total number of tax-paying enterprises in the country, of which 98% are private enterprises.
With regard to the special additional deduction of personal income tax, from January 1 this year, six special additional deduction policies, such as children's education and continuing education, were implemented, and about 48.87 million taxpayers enjoyed the policy in the first quarter. By raising the threshold and implementing special additional deductions, about 91.63 million taxpayers no longer have to pay personal income tax.
With regard to the reduction of social security contributions, starting from 1 May this year, the proportion of basic old-age insurance units for urban workers will be reduced to 16 percent, and the policy of phased reduction of unemployment and industrial injury insurance rates will continue to be implemented. As a result, the burden of social security contributions for enterprises, especially small and micro enterprises, has been substantially reduced. At the same time, we should further clean up and standardize administrative fees and charges.
This year will reduce the burden of corporate taxes and social security contributions by nearly 2 trillion yuan, known as "the largest tax cut in history." At present, the main tax reduction and fee reduction policies and measures are clear, and the key is to do a good job of implementation in the spirit of hammering nails, closely follow up and solve problems in the process of implementation in a timely manner, and step up supervision and supervision, so that enterprises and the masses can have a real sense of achievement.
Third, support the three major battles, and there is no shortage of finance.
A good fight against the three major challenges is related to winning a decisive victory in building a well-off society in an all-round way. The financial department plays a particularly important role in supporting the three major battles. By grasping the most direct and realistic interests of the people, highlighting the publicity and fairness of finance, and perfecting the arrangement of the fiscal and taxation system, We can effectively play the role of preventing and resolving major risks, eliminating poverty, and improving the quality of the ecological environment, and constantly enhance the people's sense of achievement, happiness, and sense of security. In view of the outstanding problems in the three major battles, the proactive fiscal policy will concentrate its efforts on supporting the fight against key battles.
We will support efforts to prevent and defuse major risks, with emphasis on preventing and resolving hidden debt risks of local governments. This year, the debt limit of local governments will be increased by 3.08 trillion yuan, which will not only provide financial guarantee for the construction of key projects, but also create better conditions for preventing and resolving the hidden debt risks of local governments. Strictly implement the responsibility of provincial party committees and governments for the prevention and control of hidden debt risks in their respective regions, and study measures such as co-ordinating the repayment of all kinds of capital resources, replacing market-oriented financial instruments, and standardizing the management of responsibility for government expenditure, and so on. We will guide local governments to gradually reduce the scale of hidden debt. At the same time, we should strengthen accountability for illegal borrowing, hold them accountable for life, and resolutely curb the increase in hidden debt.
To support the fight against poverty, the focus is on the implementation of accurate strategies. In the light of the rectification and reform of the problems found in the central special inspection to combat poverty, we have further strengthened the guarantee of investment and strengthened the supervision of funds for poverty alleviation. This year, the central government allocated 126.1 billion yuan for poverty alleviation, an increase of 18.9 percent, and the incremental funds were mainly used in deeply poor areas. We will support the fight against poverty and focus on solving the outstanding problems faced by the realization of the "two do not worry about three guarantees." compulsory education mainly does a good job in controlling dropout and insuring school, and in basic medical treatment, it mainly does a good job in medical assistance. Housing security has basically completed the construction of documents, poor households and other key objects such as the transformation of dangerous houses, at the same time to support the solution of rural drinking water safety problems. In addition, it is necessary to continue to promote pilot projects for the integration of agriculture-related funds in poor counties, and implement the whole process of performance management of poverty alleviation project funds.
We will support the fight against pollution, with emphasis on supporting green development. This year, the central government allocated 60 billion yuan for the prevention and control of air, water and soil pollution, an increase of 35.9 percent, and 81.1 billion yuan, an increase of 12.5 percent, for the transfer of key ecological functional areas. This year, we will continue to support the pilot work of cleaning and heating in winter in the northern region, improve the quality and efficiency of urban sewage treatment in the central and western regions, strengthen the control of soil pollution, and promote the restoration and treatment of cultivated land contaminated by heavy metals. We will strengthen the ecological protection and restoration of the Yangtze River economic belt, implement the policy of banning capture and compensation in key waters of the Yangtze River Basin, promote the pilot project of ecological protection and restoration of mountains and rivers, forest, lake and grass, and increase the intensity of ecosystem protection.
IV. Strong financial backing for supply-side structural reform
In accordance with the requirements of the Central Economic work Conference, we must unswervingly take supply-side structural reform as the main line, adopt more reform measures, make more use of marketization and the rule of law, and make efforts to "consolidate, enhance, upgrade, and smooth". Finance is the foundation and important pillar of national governance, and the responsibility, role and influence in the supply-side structural reform are very significant.
In consolidating the achievements of "three removal, one reduction and one supplement", we will make good use of the special award and subsidy funds for the structural adjustment of industrial enterprises, continue to dispose of "zombie enterprises", and promote more industries with overcapacity to speed up their clearance. We will implement preferential tax policies for the restructuring and restructuring of enterprises and the adjustment of production capacity, so as to promote the survival of the fittest.
In terms of enhancing the vitality of the micro main body, it will support a number of national and provincial real economic development zones to create different types of innovative and entrepreneurial characteristic carriers and promote the upgrading of the mass entrepreneurship and innovation Initiative. Give full play to the role of the National Development Fund for small and medium-sized Enterprises and the guiding Fund for Venture Capital in emerging Industries to support the development of innovative enterprises; We will properly implement the preferential policies for individual income tax on venture capital and carry out pilot projects to appropriately raise the limit of exemption from enterprise income tax on income from technology transfer among resident enterprises.
In the aspect of improving the level of industrial chain, we will guide capital and resources to focus on strategic key areas, achieve innovation breakthroughs in strategic key areas, promote major national scientific and technological projects in the manufacturing field, and help solve key core technologies. We will improve government procurement policies that support innovation and green development, give full play to the functions of the first set of policies, and increase support for the manufacturing industry, especially major equipment and key products.
In the aspect of unblocking the circulation of the national economy, financial institutions will be encouraged to increase their support for private enterprises and small and medium-sized enterprises by means of increasing trust in financing, replacing compensation with awards, preferential taxation, and so on. We will make good use of the special funds for the development of inclusive finance, promote the state financing guarantee fund to speed up business cooperation with provincial and municipal financing guarantee and reguarantee institutions, and continue to reward and subsidize the financing guarantee business of small and micro enterprises, so as to alleviate the difficulty and high cost of financing for enterprises.
V. what practical measures have been taken to promote the formation of a strong domestic market
China has great resilience, potential and room for manoeuvre, and a domestic market with a population of more than 1.3 billion, which is the foundation of economic development. In the face of the complex and changeable external situation, the active fiscal policy has put forward practical measures to stimulate consumption potential, promote effective investment, and promote the coordinated development of urban and rural areas, so as to stabilize and expand the effective domestic demand. To provide effective support for the smooth operation of the economy.
Active fiscal policy can stimulate the consumption potential of residents. For example: adapt to the new trend of service consumption, improve the fiscal and taxation policies to support social forces to provide education, culture, sports, pension, medical and other services, and cultivate new consumption growth points; We will speed up the reform of government purchasing services in key areas, expand the scope and scale of purchases, and improve the quality of public services, focusing on agricultural products and related fields to support the construction of a modern supply chain system. We will promote comprehensive demonstration of e-commerce in rural areas and expand the consumption of agricultural products.
Active fiscal policy can promote effective investment. The issuance of new bonds by local governments has been accelerated, and all localities have been able to effectively stabilize investment by using funds in a timely manner for key projects to make up for shortcomings and increase stamina. This year, the central government will allocate 577.6 billion yuan in infrastructure investment, which will further optimize the direction and structure of investment and support the construction of key areas and weak links in transportation, water conservancy, energy, ecological environmental protection, agriculture and rural areas. We will enhance the supporting capacity of infrastructure such as information networks and modern logistics, implement a number of key projects to improve the ability to prevent and control natural disasters, and promote the planning and construction of the Sichuan-Tibet railway.
Active fiscal policy can promote the coordinated development of urban and rural areas. The implementation of rural revitalization strategy needs to build and improve the fiscal policy system and institutional mechanism in order to enhance the comprehensive capacity of agriculture. The renovation of rural living environment, which focuses on the treatment of rural garbage and sewage, the revolution of latrines, the improvement of village appearance and the utilization of agricultural waste resources, needs strong financial support. Support for the old revolutionary base areas, ethnic minority areas, border areas and poor areas is also increasing, and transfer payments arranged by the central government for young and old border and poor areas have increased by 14.7 percent. In addition, through practical measures, finance will promote the implementation of major national regional strategies such as the joint construction of "Belt and Road Initiative", the coordinated development of Beijing, Tianjin and Hebei, the development of the Yangtze River economic belt, and the construction of Guangdong-Hong Kong-Macau Greater Bay Area.
VI. Fiscal policy focuses on ensuring and improving people's livelihood
Finance is taken from the people and used by the people. Ensuring and improving people's livelihood is the concrete embodiment of adhering to the people-centered development thought, is the fundamental purpose of development, and should also become the focus of fiscal policy. We must persist in doing our best and doing what we can, improve the system, hold the bottom line, and meticulously do a good job in all kinds of livelihood work. This year, the government will further increase investment in people's livelihood, strengthen the management of expenditure on people's livelihood, and strive to ensure the basic people's livelihood, especially in the areas of employment, education and social security.
In terms of actively promoting employment and entrepreneurship, we will greatly increase funds for employment subsidies, implement the national policy on inclusive employment and entrepreneurship, support the employment of key groups such as college graduates, migrant workers and veterans, and implement a new apprenticeship system for enterprises.
In terms of supporting the development of fair and high-quality education, we should implement the requirement that "one is generally not lower than one, and two are only increasing without decreasing", so as to maintain a sustained and steady increase in financial investment in education. This year, the central government has spent more than 1 trillion yuan on education. We will speed up the improvement of the conditions for running rural schools, focus on eliminating the "large class size" of urban schools, promote the simultaneous development of public and private schools, and expand the resources of inclusive preschool education. We will expand the coverage of scholarships in higher vocational colleges, raise funding standards, and establish national scholarships for secondary vocational education.
In terms of raising the level of social security, starting from January 1 this year, the basic pension standard for retirees of enterprises, government organs and institutions will be raised by an average of about 5%. We will increase the central adjustment proportion of the basic old-age insurance funds for enterprise workers to 3.5 percent, speed up the promotion of provincial plans for old-age insurance, create conditions for the realization of overall planning throughout the country, and continue to transfer part of the state-owned capital to enrich the social security funds. A unified system of basic medical insurance and serious illness insurance for urban and rural residents will be established in an all-round way. The standard of financial subsidy for medical insurance for urban and rural residents will be raised by 30 yuan to 520 yuan per person per year, and half of the 30 yuan increase will be used to enhance the security capacity of serious illness insurance. In addition, we will continue to promote the transformation of urban shantytowns and dilapidated houses in rural areas, so as to ensure the basic living needs of people in need. We will strengthen the construction of the social assistance system and support all localities in the areas of minimum security, assistance for people living in poverty, temporary assistance, basic living security for orphans, and so on.
This year, we will step up efforts to implement a proactive fiscal policy, which will put tremendous pressure on the fiscal balance. In order to make up for the local financial gap caused by large-scale tax cuts and fees, the central government has vigorously reduced general expenditure and arranged transfer payments of more than 7.5 trillion yuan to local governments, the largest in recent years. At the same time, according to the current economic situation and the needs of all aspects of expenditure, expand the scale of fiscal expenditure. In 2019, the national general public budget expenditure exceeded 23 trillion yuan, an increase of 6.5 percent, and the deficit was 2.76 trillion yuan, and the deficit ratio increased from 2.6 to 2.8 percent. In addition, the scale of local government special bonds was greatly increased, and local government special bonds were arranged for 2.15 trillion yuan, an increase of 800 billion yuan over last year.
What is particularly important is that in the face of the fiscal reduction brought about by the implementation of larger tax cuts and fees, in order to ensure a better role of fiscal policy, to ensure the balance of the annual budget and the implementation of established fiscal policies, governments at all levels must take the lead in tightening their lives. Always adhere to hard struggle and thrift. It is necessary to regard tightness as the policy of long-term adherence to financial work, and earnestly implement and embody it in the whole process and in all aspects of financial work.
Source: Qiushi 2019 10