China unveiled guidelines to carry out a medium-term finance plan on Jan 23, vowing to further step up the reforms of fiscal and taxation system.
The guidelines, released by the State Council, lets the government financing play a bigger role in China’s economic restructuring and the transformation of development modes.
The plan will forecast financial revenue and expenditure in the following three years based on major economic indicators and policies. It is also responsible for locating the problems of government financing concerning its revenue system, expenditure policy, and potential risks of local debts.
The three-year progressive plan aims to address emerging financial issues after the Chinese economy entered a “new normal” and strike a good relationship between economic progress and improving people’s livelihood by preventing financial risks.
The government encourages the financial department to discuss with relevant departments and draw up a reform plan on financial income and expenditure polices.
The efforts include putting forward road maps and timetables on issues including tax reform and governmental funded projects, reviewing and specifying the major reforms, expenditure polices and projects during the three-year period, as well as setting the reasonable amounts of financial deficit and national debts to prevent risks.
The government will forecast the financing situation in three years based on the reform plan to try to strike a balance.
According to the State Council statement, the Ministry of Finance will take the lead in working out the national medium-term financial plan, which will restrict the central budget and guide the local governments’ planning work.
The government also asked all departments to submit their financing figures of major reforms and policies of the next three years to the Ministry of Finance and draw up a three-year progressive financing plan individually.