Income Tax Revenue Sharing Scheme Aims at Common Prosperity

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Last updated at: (Beijing Time) Tuesday, March 12, 2002

Income Tax Revenue Sharing Scheme Aims at Common Prosperity

The income tax revenue sharing is a major move for mutual support, mutual cooperation and common prosperity of all regions in the country, according to an analyst.

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The income tax revenue sharing is a major move for mutual support, mutual cooperation and common prosperity of all regions in the country, according to an analyst.

This is yet another major move following the reform of the revenue sharing scheme.

By the new scheme, the central government and local governments will share income tax revenue from most of the enterprises and all the personal income tax on the 50-50 basis for 2002 and on the 60-40 basis for 2003, with the proportions for time beyond 2003 to be determined according to the specific circumstances. The share of the central government will all be used as transfer payments to the middle and western parts of the country.

In the past, the central government had to rely on issuing more state treasury bonds to support the development of the middle and western parts of the country, said Vice-Minister of Finance Jin Liqun. But such practice could not last long and in the future the central government can only do it by increasing transfer payments.

The eastern coastal region benefited from the preferential policies of the state in their reform and opening up and now the middle and western regions will benefit from the new income tax revenue sharing system in the western China development drive, said an NPC deputy. It would go a long way to helping narrow the growing gaps in income and development between the eastern part and the middle and western parts of the country that had been widened in the course of reform and opening up.

With more money transferred, the middle and western regions will have greater financial resources for development and for easing the difficulties of the county and township finances, according to Guo Daxiao, a deputy from the western region.

According to the draft budget for this year, the central finance will transfer over 118 billion yuan as wage outlay alone for the middle and western parts of the country.

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