Research On The Reform Of Tax Management System At The Provincial Level And Below

Since the implementation of the tax sharing reform in 1994,the financial management system of the central government and local governments has been gradually established and improved.At the same time,compared with the central government and local governments,the provincial governments have established a set of provincial-level financial systems based on the facts of the government.However,the current taxation management system of sub-provincial government still needs improving.The division pattern of the system's core tax revenue is also confusing,including the tax-sharing model?the sharing model?the division model? the subordination division model and so on.The local tax revenue allocation scheme,called "one province,one model",considers the provincial governments' abilities in dealing with the decentralized institutional arrangements for free-space management.It also considers the self-management and local government behavior of the municipal and county governments?system innovation heterogeneity and the balancing of factors such as the mobility of factors within the jurisdiction.For local governments,their taxation rights are incomplete.There are significant differences between provincial-local governments and central-provincial governments in terms of finance.Therefore,tax revenue sharing and division are the main parts of the local government allocation of tax income rights.This paper believes that studying the division of tax revenue of provincial and sub-provincial governments can better reflect the financial relations between local governments.Then,how is the current situation of taxation system of sub-provincial governments? Does the tax revenue distribution model adapt to the provincial development? In order to find the answers,this paper first carries out a general analysis of the provincial and sub-national taxation management systems in China,covering the concepts?development history of taxation systems? taxation agency settings and tax revenue allocation models.Secondly,this paper chooses Zhejiang province as a specific research object and makes a deep analysis of its financial background? tax revenue division models?its achievements and current problems.Third,this paper applies the measurement model PROBIT to empirically analyze the factors affecting the tax revenue classification model of the provincial governments.In the end,based on the general analysis of the provincial and sub-provincial taxation management systems in China,taken the current analysis of the taxation management system of Zhejiang Province as a breakthrough point,combined with the empirical analysis of the influencing factors of the taxation model of sub-province,this paper proposes advices about the reform of taxation management systems of provinces and sub-provinces to guide provincial taxation system policies,promote the division of finance and issues,accelerate the establishment,cultivate of taxation at the municipal and county level and deepen the tax collection and management system.To achieve these aims,this paper has done the following researches:First,this paper elaborates on the historical evolution of provincial and subprovincial taxation management systems.Second,this paper selects 26 provinces/municipalities(excluding Hong Kong,Macao,Taiwan and 4 municipalities.Tibet is not included because its fiscal revenue relies basically on government funding)as a sample.This paper sorts out 70 plus pieces of policy documents of 26 provinces and municipalities on provincial and subprovincial tax revenue distribution models since the reform of the tax distribution system in 1994.The tax revenues of 26 provinces and municipalities are roughly classified into 3 categories,namely "Tax Distribution + Share " mode ? "Tax Distribution + Split"(Incremental/Total)mode and Mixed mode,that is,based on the "Tax + Share" or "Tax + Split"(Incremental / Gross)mode,the provincial government receives special tax revenue of the industry and enterprise.Through sorting out the taxation patterns of provinces and sub-provinces,it is found that provincial taxation is based on sharing.It has a distinctive feature from the central and local tax sharing system.However,there are problems existing in the sub-provincial taxation system in terms of tax revenues.The provincial government is in a dominant position,which limits the power of municipal and county governments.The trend of unification of the main types of taxes appears in local government,besides,the taxation authority and management authority of governments are mismatched.Third,this paper gives a detailed introduction to the financial background of Zhejiang Province and the current tax revenue division model.The “provincial direct management county” policy in Zhejiang Province transforms from the previous “province-city-county” three-tier system to the “provincial-city-county” two-tier system.The implementation of the “strong county expansion” reform has fully released the economic vitality of counties in Zhejiang Province.The administrative and social service capabilities of the counties and cities have also been continuously improved.In this context,Zhejiang province adopts the "Tax Distribution + Split"(Incremental/Total)mode.Excluding the implementation of the total value of Hangzhou,the province's share is 16%,and the remaining cities and counties are divided into increments.There are 0,10%,15%,and 20% fourth gears.Fourth,this paper reviews all the fiscal yearbooks in Zhejiang Province in recent years and the annual and final accounts of provincial and municipal cities and counties to sort out tax revenues?general budget revenues and public service expenditures at all levels and regions.The relevant financial data is presented in forms such as tables and graphs.The problems,such as vertical and horizontal imbalances in tax revenues in Zhejiang Province?unbalanced structure of tax expenditures?overly consistent tax types at all levels of government and high taxation and taxation costs,are analyzed.Solving these problems will be a breakthrough of China's provincial taxation management system reform.Fifth,this paper collects data of 26 provinces in 2016 from the official website of the National Bureau of Statistics of China as a sample,takes sub-provincial tax division model as an explanatory variable and adopts Eviews software to analyze data.First,the six explanatory variables of per capita disposable income? GDP?GDP?tertiary industry share? economic growth rate? fiscal self-sufficiency rate and per capita tax revenue are used to perform PROBIT model regression,excluding the insignificant explanatory variables in the tertiary industry and economic growth rate.Secondly,the correlation coefficient between explanatory variables is calculated and the explanatory variables with correlation coefficient exceeding 0.8 are excluded.Finally,it is concluded that the fiscal self-sufficiency rate is an important factor affecting the provincial government's selection of tax revenue division model.The goodness-of-fit test of the PROBIT regression model with the tax division model shows that the goodness of fit has reached 84.62%.