Fiscal, tax system reforms key to development

CAI MENG/CHINA DAILY The Central Economic Work Conference held in December proposed to arrange a new round of fiscal and tax system reform measures. The upcoming fiscal and tax system reform needs to better define the roles of the central government and local governments, improve the delineation of governance and fiscal responsibilities between them, and carry out corresponding reforms in the establishment of related supportive institutional frameworks. It is also imperative to further deepen reform of the fiscal and tax system at sub-provincial levels to bolster the financial sustainability of local governments. Local governments may adjust measures to be in harmony with local conditions and gradually develop a local tax system primarily based on locally exclusive taxes. We should also investigate the viability of modestly delegating some fiscal authority to local governments, therefore bolstering their financial resources and motivating them to better carry out their respective responsibilities.