A Study Of Issues On Fiscal Systems At And Below The Provincial Level Of Jilin Province

Jilin Province has been long termed both major food-producing province andminor finance-contributing province, and has substantially benefited from the financetransfer payment system. Before the reform and opening, Jilin Province was once themost significant industrial base and developed region of China, making a historicalsignificant contribution to establishing China’s independent and integrated industrialand national economic system, and the reform and opening and modernizationconstruction of China. In spite of once being in the forefront of the then level ofeconomic development, Jilin Province has fallen further behind due to the growingeconomic disparities caused by the rapid economic development of other developedregions after the reform and opening, ranking the17th among the31provinces,autonomous regions and municipality directly under the central government in thecomprehensive ranking of economy by2013. For the purpose of economicdevelopment, Jilin Province has launched the plans of rejuvenating the oldnortheastern industrial base and the rise of central part, while the fiscal revenue ofJilin Province still remains weak comparing with other developed regions of China,with the long-term unsolved problems in the economic development of Jilin Province,of which the size is not large enough, the structure is not optimized enough and theefficiency is not high enough.The fiscal administration system of tax distribution under the provincial level ofJilin Province was established in1994when the reform of the system of tax wascarried out. Such system, generally speaking, well fit in with the needs of thedevelopment of economy and society, and motivated governments at all levels under the province to develop the economy, cultivate the financial resources and increaserevenue and cut expenditures, after the sharing reform of business tax and income taxin2002and the tax sharing of the central government-led enterprises in the four fieldsof petrol, petrochemical, electricity and nonferrous metals in2007. Particularly since2003, the system has been improved and adjusted constantly, both regulating theincome division of governments at all levels under the province and facilitating therapid development of the provincial economy and the substantial increase of the fiscalrevenue, and realizing the moderate inclination of the provincial financial resources tothe grass-roots units and motivating the county and township to develop the economyand increase revenue and cut expenditures, by which the financial difficulties of thecounty and township has been initially eased and which has facilitated theequalization of basic public service across the province. However, with the rapiddevelopment of the province, the problems of the reform of tax system have beenincreasingly exposed, and some conflicts and problems in financial system under theprovincial level of Jilin Province have accumulated. The main problems are that thefiscal expenditure is not clear with the expenditure mismatching the financialresources, fiscal operation of basic-level government is difficult, the transfer paymentsystem is not sound, the financial disparities between regions in the province are largeand the operating efficiency of the system has much room for improvement, etc. Insuch case, it is still a long way to go to meet the requirements of establishing a perfectsocialist market economy system, building classified fiscal system matchingadministrative power, and promoting economic and social harmonious developmentof Jilin Province. The permanent solution to solve these problems completely is tofacilitate the balanced development of regional economy and the transformation ofgovernment functions, adjust the structure of fiscal expenditure, perfect the transferpayment system under the provincial level and further improve the fiscaladministration system under the provincial level. This article holds that there exist many problems, which are caused by the lackof standardization and completeness, resulting in a series of local fiscal problems, ofthe fiscal decentralization, of the fiscal system under the provincial level, instead offiscal decentralization in the manner of system of tax distribution. This article,focusing on local fiscal system, aims at the issues of fiscal reform under theprovincial level of Jilin Province and points out, based on the fiscal data under theprovincial level of Jilin Province from1994to2011, the problems of the fiscal systemunder the provincial level in respect of "county directly under the provincialgovernment","township finance under the county government" and the financetransfer payment system under the provincial level, and combines the currentsituation of Jilin Province to make out a clear relation of finance between theprovince, municipality, county and township. This article holds that, through regularand complete fiscal decentralization, the relations between administrative power,financial power and financial resources of local governments at all levels can beperfected and it will come to the final institutional target of the unification offinancial power and administrative power, the matching of financial resources withexpenditure responsibility, and the equalization of basic public service.