Land transfers now major source of local governments' fiscal revenue: report (2)

09:03, December 30, 2010      

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Also, the increasing mortgages add to the financial risks and also lead to increased expenditures of funds, according to the report.

Zou Xiaoyun, deputy chief engineer of the China Land Surveying and Planning Institute (CLSPI), said that the "land finance" is unsustainable since the land available for construction is limited and once it is all sold the governments' fiscal revenue can not be guaranteed.

An official in one of China's coastal cities said that his local government also has some difficulties since the taxes do not cover the costs for the construction of infrastructure and affordable accommodation.

Jia Kang, director of the Research Institute of Fiscal Science of the Ministry of Finance, said that during the twelfth five year plan, the central government and local governments will have a balanced share of the taxes and the local governments will rely less on the "land finance".

Some experts said that the land belongs to the state, and the governments have the right to get some income, but the key is to better manage the funds, formalize the land imposition and decrease any injustice in the process.

But it is difficult for the local governments to give up their monopoly on land acquisition - and what the country needs to do is to implement reforms in this matter.

Source: Global Times
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