Full text: Report on China's central, local budgets(14)

5. Progress in Fiscal and Tax Reforms

We continued to improve the structure of transfer payments and increased general transfer payments. We improved the mechanism for ensuring basic funds for county-level governments, and enhanced their ability to provide public services. We carried out the reform to place county finances directly under the management of provincial-level governments in 1,080 counties of 27 provincial-level administrative areas. We improved public finance budgets, made budgets for government-managed funds more detailed, and expanded the coverage of state capital operations budgets and the scope of compiling budgets for social insurance funds on a trial basis. We eliminated all off-budget funds and placed all government revenues under budgetary management. We improved budget management systems, such as departmental budgeting, centralized treasury collection and payment, and government procurement, and carried out performance-based management throughout the course of compiling, implementing and evaluating budgets. We devised a pilot plan for replacing business tax with VAT to promote development of the service sector. We reformed the individual income tax system. We carried out trial reforms to collect property tax on personal homes, and adjusted the business tax policy for selling them. We carried out a nationwide reform to calculate resource taxes on crude oil and natural gas based on their prices, and integrated the resource tax systems on crude oil and natural gas for domestic and overseas-funded enterprises. We increased central government subsidies to reform collectively owned factories operated by SOEs across the country. We supported the reform of state-owned financial institutions and improved performance assessment systems for financial enterprises.