SMM News: finance Minister Liu Kun recently issued an article on "Qiushi" saying that this year, more efforts will be made to implement a positive fiscal policy, which will bring great 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, Liu Kun said, the scale of fiscal expenditure should be expanded in the light of the current economic situation and the needs of all sectors of 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.
Fu Yifu, a senior researcher at the Su Ning Financial Research Institute, told the Securities Daily that in the short term, large-scale tax cuts and fees will lead to a reduction in fiscal revenue, which in turn will affect fiscal expenditure, especially the part of rigid expenditure. However, tax reduction and fee reduction can effectively stimulate the vitality of enterprises, reduce the operating costs and burden of enterprises, and enable enterprises to invest more funds in technological improvement and expanded reproduction, so as to improve business efficiency at the same time. Contribute more taxes to the government. Therefore, in the long run, large-scale tax cuts and fees will not bring too much pressure on fiscal revenue and expenditure, on the contrary, it may also promote the increase of fiscal revenue.
So what policies can be taken to deal with the fiscal revenue reduction effect of large-scale tax cuts? In this regard, Zhang Yiqun gave five "prescriptions": first, it is necessary to further speed up the issuance and use of local government bonds, especially special bonds, and enhance the ability of government investment to support economic growth; Second, on the original basis to further strengthen the reduction of general expenditure, in addition to continue to invigorate the financial stock of funds, reduce the budget indicators of some departments; Third, we should strengthen the integration of special financial funds, open up the channels for the use of special funds, broaden the scope of use of special funds, speed up the flow of financial funds, and enhance the flexibility of finance, especially local finance and grass-roots finance. Fourth, we will carry out comprehensive and in-depth evaluation of fiscal policy and revenue and expenditure performance, improve the efficiency and efficiency of fiscal revenue and expenditure, and make effective funds more effective; fifth, we will enhance the ability of financial operation. Firmly establish the "tight life" idea, so that reduced government spending into the energy and motivation to stimulate the market.
"the large-scale tax cuts and fees currently being implemented have put greater pressure on the revenue and expenditure of local finance, especially in central and western counties and cities where fiscal revenue is relatively difficult. Therefore, it is necessary to take measures to stabilize the expansion of local fiscal deficits." Liu Xiangdong, deputy researcher of the Economic Research Department of the China Center for International Economic Exchange, told the Securities Daily that in addition to the government's efforts to increase transfer payments to some counties and cities with a relatively large gap in financial revenue and expenditure, it is also necessary to introduce fiscal soundness measures. We will rectify the discipline of fiscal expenditure and reduce local fiscal and public expenditure. For local governments, in addition to open source, we have to cut expenditure in order to achieve fiscal balance. At the same time, open source needs to cooperate with the reform of the tax system to cultivate the main types of local taxes.