Data II: Historical replay of the decision-making background of the tax-sharing system

Backplay of the background of tax-sharing decision-making

(Part 1)

The eve of implementation: central finance on the edge of the cliff

In the late 1980s and early 1990s, China's central finance fell into a serious crisis. Due to the rapid decline in the proportion of fiscal revenue in GDP and the proportion of central fiscal revenue in the entire fiscal revenue, the central government is facing an unprecedented "weak central" state. The weak financial resources of the central government have led to a serious shortage of construction funds necessary for national defense, basic research and all aspects that require national financial investment.

It was this financial crisis that made the CPC Central Committee and the State Council determined that a far-reaching reform of the tax-sharing system kicked off in China.

The shy finance minister

The annual National Finance Conference is just like family finance. Is the income and expenditure balanced? Does the expenditure exceed the annual income? How to arrange the expenditure in the next year, etc. A financial meeting is a meeting in which every member of a large family participates in summarizing, judging and making the budget of the previous year's budget.

The National Finance Conference in 1991 left a deep impression on a person who had just arrived at the Ministry of Finance. At that time, the finance Minister was Wang Bingqian. The staff member said that the main topic of the annual financial meeting is to make the financial budget for the next year. At that time, the central government was very difficult. The budget for the second year could not be arranged anyway. There was a big hole, because the tax revenue in the previous year was only more than 297 billion yuan, which was very difficult in many places, and it caught up with Guizhou. In the disaster, the central government has no money to give to the local government. Out of desperation, Wang Bingqian asked all provinces to make "contributions" ranging from 10 million to 100 million yuan.

The finance will become a "fundraising" meeting. Some finance department chiefs said to Wang Bingqian, "I asked for money, but I didn't!" The heads of finance departments of some rich provinces and finance ministers face to face. Many years have passed, and I am still sad for Minister Wang. At that time, being the finance minister was very pitiful. A Ministry of Finance cadre recalled.

Does "anti-eye" make sense? Yes! For example, in Guangdong, according to the "contract" signed with the central government, only 2.274 billion yuan is paid to the central government every year, an increase of 9%. If you ask for more money, it will exceed the scope of the "contract". However, what made the finance ministers not be able to come to Taiwan was that he thought that because the central government gave Guangdong a lot of preferential policies, even the tariffs were left to Guangdong. When the central government encountered difficulties, it would be so faceless to ask for a small amount of money.

From the late 1980s to the early 1990s, there were two cases of "borrowing money" from local finances by the central government, and the total amount was about 2.3 billion yuan each time. In fact, people know in their hearts that it is called "borrowing", which is actually "taking", which means "contribution" to the place.

The financial meeting also "pressures" the tax indicators from the local government. If it can't be suppressed, the budget plate will not be settled, and the central finance will have no rice in the next year. Therefore, the "circle fight" at the financial meeting was unreachable. The director of the tax bureau "fed" with the Ministry of Finance, and the director of the Department of Local Finance also "fed" with the Minister of Finance. The tax bureau said: We can't accept so much. The Ministry of Finance insisted on giving in. At that time, almost all provinces objected to the tax indicators issued by the central government, especially in rich areas.

The annual National Finance Conference is held for more than half a month to 20 days. The meeting does not seriously summarize the financial and tax work, but becomes a meeting where people can't argue for "receiving tasks" and "receiving" the target of tax.

In 1992, Liu Zhongqi took Wang Bingqian as Minister of Finance. During the handover of work, Liu Zhongqi took the account book in his hand and said to Wang Bingqian: Dude, I really admire you. How have you been here all these years? He knows the hardships of the former minister best.

Liu Zhongqi recalled with emotion: "Those years were really difficult." He took the treasury statement to Zhu Junji, then Vice Premier of the State Council. Premier Zhu only said one sentence: You, the Minister of Finance, are really shy!

In 1992, the national fiscal revenue was 350 billion yuan, of which the central revenue was 100 billion yuan, the local revenue was 250 billion yuan, the central fiscal expenditure was 200 billion yuan, and the deficit was 100 billion yuan. Most of the deficit that year was reported to banks. The central finance was very difficult. Liu Zhongqi borrowed money from Premier Zhu, who was in charge of the bank, but Premier Zhu did not agree.

Central finance is unsustainable

In the first half of 1993, some indicators issued a warning that the national finance, especially the central finance, was very tight:

The entire fiscal revenue fell by 2.2% in the first quarter compared with the same period in 1992, and it was only flat in terms of comparable caliber; industrial and commercial tax revenue was 140 billion yuan, an increase of 12% over the same period last year, excluding the export tax rebate of 10%, an increase of only 1.4% over the same period last year. The GDP in the first quarter of 1993 increased by 15.1% and reached 14% in the first half of the year, which was much higher than the GDP growth of 12.8% in 1992. The proportion of fiscal revenue and economic growth is unbalanced, and the growth rate of national production is very high, while the national finance, especially the central finance, is very tight.

The tax increase is small, but the expenditure has increased significantly. There are many situations where funds are not in place: the financial loss subsidy funds for grain acquisition are not in place; the key construction funds are not in place, and many key constructions are stuck, such as railways, ports, civil aviation, etc. According to the progress of previous years, key construction funds should allocate at least 40% of the whole year in the first half of the year, compared with 19.5% in the first half of 1993, a gap of nearly half; key production enterprises and key export enterprises lack liquidity.

At the same time, the hard expenditure that needs to be spent in the central fiscal revenue cannot be less. After Premier Zhu announced that no matter how difficult the finance was, he could not overdraw the bank, so that year, Liu Zhongqi went to Premier Zhu's Vice Premier three times, hoping that he would approve the note to borrow money from the bank, but naturally he did not borrow it. At that time, it was already in a situation where the salary could not be paid without borrowing money.

The financial situation is so tight that Premier Zhu and Vice Premier have paid great attention to it. He realized that if this situation continues, "it will collapse in 2000. This is not alarmist."

Ensuring the necessary expenditure of the state has become an urgent need. On July 23, 1993, Vice Premier Zhu came to the National Finance and Tax Work Conference and said to all the participants: "In the current system, the central finance is very difficult. Now without reform, the life of the central finance will not go on. At present, the central fiscal revenue accounts for less than 40% of the national fiscal revenue, but the central government's expenditure accounts for more than 50%, and there is an obvious difference in revenue and expenditure. The central government has to issue a large number of debts, otherwise it will not last. Last year, domestic and foreign debts borrowed more than 90 billion yuan from banks. This year, it is expected to be more than 100 billion yuan. The central government is carrying a large amount of debt, and it is getting heavier and heavier. The central government's financial difficulties are in a trend of intensification. Generally speaking, in developed market economy countries, the proportion of central fiscal revenue is more than 60%. The central expenditure generally accounts for 40%, and the local government accounts for 60%. But on the contrary, the contradiction between income and expenditure is very prominent. This situation is contrary to the development of the market economy and must be adjusted.

Serious consequences of the decline of "two specific gravity"

Since the 1980s, China has experienced sustained high-speed economic growth. From 1980 to 1990, the average growth rate of GDP was 9.5%. The rapid growth of the economy has not driven or promoted the simultaneous growth of national financial resources. At that time, the Ministry of Finance revealed that the ratio of government fiscal revenue to GDP fell from 31% in 1978 to 14% in 1992. The proportion of central fiscal revenue has been declining, which has weakened the central government's ability to regulate the macro economy.

Why does the proportion of fiscal revenue in GDP continue to decline? Why does the proportion of central fiscal revenue in the total fiscal revenue continue to decline? What caused the central government's financial capacity to fall to an all-time low and have fallen into a "weak central government"? Xiang Huaicheng, the former Minister of Finance, who has worked in the financial department for 41 years and has resigned, believes that this is because of the result of the tax system at that time. The tax has been "inclusive" and there is no increase in the central government.

He said: "Before the reform of the tax-sharing system, our financial system has always been in a volatile and unstable state. Before 1993, in more than 40 years, it had changed no more than 15 times, and the shortest financial system only lasted for one year.

At that time, the national financial system was generally divided into incremental income package, total share, total share plus growth share, increase package, fixed-up, fixed subsidy, and there was also a five-five-point tax-sharing pilot. This situation is vividly compared to the "one province, one rate" financial system.

The shortcomings of the old financial system can be seen from Shanghai and Beijing. Shanghai implements the model of adding incremental shares on the quota. The annual fiscal revenue is 16.5 billion yuan, 10 billion yuan will be allocated to the central government, and 6.5 billion yuan will be allocated to the local government. For each additional 100 million yuan, the central and local governments will be divided into five-fifths. As a result, Shanghai has implemented financial contract for five years, and the annual fiscal revenue is between 16.3 billion yuan and 16.5 billion yuan, with no growth at all. For Beijing, the incremental income package sharing model is adopted. The agreed annual growth rate is 4% in five years, and Beijing's annual fiscal growth is 4%. After the tax-sharing system, Beijing concealed 9.8 billion yuan of income.

The so-called contracting is "contracting profits without losses". Even if the contract comes up, it can't keep up with the rise in prices. As soon as the price rises, the finance will be short of another piece, which has caused difficulties in tax sources. At the same time, after the local contract, there is such a mentality: if I increase one yuan, you still have to take a few cents. If you don't increase the income, won't you take it at all? As a result, there is the phenomenon of "himming rich in enterprises" and "himming rich in local places", which reduces or exempts product taxes for enterprises, resulting in "no growth", and then collects fees through amortization through non-financial channels. In the end, the production developed rapidly, and the indirect tax (product tax) could not be collected. In this way, the central income was "contracted" and "contracted" to the financial difficulties of the central government. And local life is much better than that of the central government.

Xiang Huaicheng said: The fiscal and taxation system of a market economy country should be stable and standardized, and a fair and transparent distribution system that is more in line with the principles of market economy. The frequent and rotating fiscal and tax system of our country at that time caused great distrust of the central government and mutual suspicion, because I don't know how to change it next? How to change it? I don't know the future expectations.

Because the "tax" could not be collected, the government began to think of "fee", Liu Zhongqi said. By the mid-1980s, there was no way to have an "energy and transportation fund", which increased by 10% (about 10 billion yuan overall) on the original basis to supplement the shortcomings of the central government's finance. By 1989, it still couldn't go on. Finance was limited by the policy system, and another policy was introduced, called the "Budget Adjustment Fund", which increased revenue by 5% at the same caliber. At that time, before the annual financial meeting, it was always necessary to introduce some charging measures.

(Part II)

The plan is decided: the arduable journey of institutional innovation

The environment of the era of institutional innovation

In the 1990s, China's senior management decided to build a socialist market economy system, which was a major strategic measure of epoch-making significance. Since then, all major reforms and institutional innovations, including the reform of the tax-sharing system, have come from the reform and development environment formed by the implementation of this strategic measure.

The reform of the tax-sharing system has gone through eight years from proposal to final introduction. In 1987, China's senior officials had a motion to implement a tax-sharing system: the report adopted by the 13th National Congress of the Communist Party of China held in October 1987 mentioned very briefly that "the tax-sharing system should be implemented under the premise of a reasonable division of the scope of central and local financial revenue and expenditure".

Liu Zhongqi talked about this past:

At that time, the tax-sharing system was just an idealistic design. At the Central Economic Work Conference, Yao Yilin, member of the Standing Committee of the Political Bureau and Vice Premier of the State Council, put forward the relevant idea. Because the social and economic environment at that time did not require the implementation of the tax-sharing system, and it did not have the market economy financial and tax system required to implement the tax-sharing system, it was impossible to implement the tax-sharing system under the planned economy, so it suffered several The province strongly opposed it, because it directly touched local interests, so the attempt was unsuccessful.

In 1990, Li Peng, then Premier of the State Council, proposed to implement the tax-sharing system in a planned way during the Eighth Five-Year Plan for the Formulation of the Ten-Year Plan for National Economic and Social Development and the Eighth Five-Year Plan. In view of the situation at that time, it was necessary to continuously improve the financial package system, in the same year, the Ministry of Finance put forward the system plan of "tax subcontracting".

At the beginning of 1992, after Deng Gong issued a Southern Talk, the socialist market economy entered the court and the tax-sharing system was proposed again. In 1992, the report of the 14th National Congress of the Communist Party of China proposed that "the tax diversion and tax-sharing system should be gradually implemented". In the same year, the central government selected Tianjin and other nine regions to carry out the tax-sharing system pilot.

Xiang Huaicheng said: "The 14th National Congress of the Communist Party of China held in 1992 is iconic. From the perspective of reform, at this conference, with the concept of socialist market economy put forward by Comrade Xiaoping, Comrade Jiangzemin expounded the goal and model of our national system reform, and formally included the theory of socialist market economy in the document of the Party Congress for the first time. After the Party Congress deliberated and approved the political report, the reform direction of the market economy has actually become the common will of the CHAN Party members of the Communist Party of China. Today, we talk about the socialist market economy every day, but it was epoch-making significance to put forward the reform of the market economy at that time.

Xiang Huaicheng recalled that in May 1993, the central government set up a document drafting group for the Third Plenary Session of the 14th Central Committee. The first meeting was on May 30, and Comrade Jiangzemin came to the group to make a report on ten opinions. Comrade Jiangzemin talked about ten questions. The final formation of the document of the Third Plenary Session of the 14th CPC Central Committee is these ten questions, of which are only a little adjustment.

Comrade jiangzemin said in his speech: "Implement the tax-sharing system, reasonably divide the power of the central and local governments, and reasonably determine the proportion of the central and local authorities. The purpose is to rationalize economic relations and standardize economic activities... The fiscal and tax system and financial system reform. Revolution is a requirement for the development of a socialist market economy. It not only conforms to the usual international practice, but also considers the characteristics and specific situation of China. In doing so, it is conducive to giving full play to the enthusiasm of the central and local governments. ... When dealing with the relationship between the central and local governments, the central government should consider the difficulties of the local government, and the local government should establish an overall concept. The whole situation takes care of the part, and the part is subject to the whole situation.

The reform of the tax-sharing system has been officially written into the Resolution on Several Major Issues of the Socialist Market Economy. Tax reform is Article 18 of the fourth part of these ten issues. It can be seen that in the process of the reform of the tax-sharing system, the Third Plenary Session of the 14th Central Committee played a decisive role.

To make a plan for the night battle

In 1993, the reform of the tax-sharing system accelerated the process.

On April 22, 1993, the Standing Committee of the Central Political Bureau specially listened to the report of Minister of Finance Liu Zhongqi and Director of the State Administration of Taxation Jin Xin on the reform of the fiscal and taxation system.

On April 26, the central leadership listened to Jin Xin's report on the reform of the tax system. Comrade Jiangzemin instructed the Ministry of Finance to study the reform of the fiscal and tax system. He pointed out that the current package system is a backward system that does not adapt to the market economy. No country does this, and the fiscal and tax system has reached the point where it must be changed.

On April 28, the Standing Committee of the Central Political Bureau officially approved the basic idea of tax reform.

High-level policymakers have made up their minds to reform the old system characterized by "fiscal package". However, it is not clear whether to adopt the tax-sharing system to readjust the interests of the central and local governments, and it has not been decided whether to fully implement the tax-sharing system throughout the country.

After the Standing Committee of the Central Political Bureau that day, Xiang Huaicheng returned to the Ministry of Finance to convey the basic ideas of the central government's tax reform. According to the instructions, before May Day, several institutional reform plan drafting groups were set up, among which the tax-sharing reform group was located in the Ministry of Finance. Since then, the program team has been stationed in the Heilongjiang office in Beijing.

The first is investigation and research. In order to formulate an effective reform plan, they have carried out extensive investigation and research and mastered rich and reliable materials and information. Liu Zhongqi, Minister of Finance, and Xiang Huaicheng, Vice Minister, took the responsible comrades of the relevant departments and bureaus to conduct investigations and listen to the opinions of all parties. And learn from the experience of various foreign tax-sharing systems.

At the same time, the Ministry of Finance began to calculate and move out all the data, involving 35,000 enterprises, which is equivalent to about 80% of domestic tax revenue. Day and night in the three months of June, July and August, the program team made more than 40 sets of plans, processed hundreds of thousands of data, and made thousands of tables. The workload can be imagined. Many people work in front of the computer for more than 20 hours every day.

After fighting day and night, the first draft of the first plan was taken out before the National Finance and Tax Work Conference on July 23. The plan was immediately sent to Jiangzemin's desk. At that time, jiangzemin said: Some comrades read this plan and said that it is better for you to collect income, centralize power, and collect local financial resources. We always have to move forward and will never return to the old way of collecting and receiving all the expenditure. Comrades should have the idea of reform, understand how to deal with the socialist market economy, and what are the principles of fiscal and tax reform? The current system is a backward system that is not suitable for the market economy, and no country does this.

On July 23, the National Financial and Tax Work Conference was held in Beijing. Prime Minister Zhu and Vice Premier attended the meeting and made specific arrangements. He said: "We are ready to set up a leading group for the financial and tax system immediately according to the decision. Liu Zhongqi is asked to be responsible, and then ask the Planning Commission, the Economic and Trade Commission, The responsible comrades of the departments such as the Sports Reform Commission and the State Administration of Taxation will participate. They also need to transfer some people who are familiar with the domestic and foreign financial and tax system, understand the law, and can write to discuss, design and draft the reform plan of the fiscal and tax system.

The day before attending the meeting, Premier Zhu made it clear to Comrade Jiangzemin that he would come up with a preliminary plan and report to the central government within a month and a half.

According to Premier Zhu's vision, he will report to the Prime Minister's office meeting at the end of August, come up with the final plan on September 2, and report to the Politburo on September 3. In the following two months, Premier Zhu led relevant ministries and commissions to all provinces and regions to conduct in-depth investigation and careful calculations to ensure the implementation of the new tax-sharing system on January 1, 1994.

The concept of the tax-sharing reform plan

The reform of the tax-sharing system should take into account the enthusiasm of the central and local governments, which not only ensures the increase of the financial resources of the central government, but also does not harm the local vested interests. This is the design goal of the "win-win" plan between the central and local governments.

Design value-added tax is the key content of this reform. Because there are three reasons. First, value-added tax is the largest tax after the tax reform, accounting for 43.7% of the total tax revenue and 75% of the turnover tax. Second, value-added tax is a stable tax, so it should be obtained from the central government. Third, before the tax sharing system between the central and local governments, there were hundreds and more than a dozen tax rates for circulation tax alone.

After listening to the report on the fiscal and tax reform, Premier Zhu proposed the tax of shared tax between the central and local governments, of which value-added tax is the largest. The entry point is in the incremental share of value-added tax. He put forward the three proportions of "high, medium and low", which are the ideas of "two-eight", "three-seven" and "four-six". He asked the plan group to calculate the accounts. The core principle is "to protect local interests and take the central finance moderately".

On August 31, the Prime Minister's Office and the Ministry of Finance came up with three calculation plans of "high, medium and low". During the discussion at the Prime Minister's office meeting, only a few people thought that the central government should take the opportunity of the reform of the tax-sharing system to choose the "high" plan, but most people did not agree; there were also others who agreed with the "low" plan. The two schemes of "high" and "low" were quickly rejected, and more people prefer the "middle" scheme of "three seven". Finally, when it was handed over to the Political Bureau of the Central Committee for discussion, it was determined that the proportion was 75:25. However, the 1:03 coefficient has not been determined.

The determination of the coefficient is a way to motivate the place. Taking a base year as the base point, all local taxes are returned, and a given coefficient is returned. What is the appropriate coefficient? At the beginning, the Ministry of Finance tended to determine according to the inflation rate. Premier Zhu thought that this would not work. He proposed whether he could consider determining according to the actual income increase ratio, factorization and indexing of the central government, and asked the Ministry of Finance to study again.

Finally, a 1:0.3 coefficient was determined. How to share the method? In the 1:0.3 coefficient, the central takes the 0.7 coefficient of the increment, the local takes the 0.3 coefficient of the increment, the central takes the incremental big head, and the local takes the small head. Xiang Huaicheng said, "This is the model. The final calculation ratio is 52.5: 47.5, which meets the requirements of improving the central financial resources.

The reform of the tax-sharing system is a gradual reform. On the basis of recognizing the full return of the local base, on the basis of the return of the next year's value-added tax, a growth ratio is returned to the local 0.3. The actual growth of local value-added tax is taken by the central government. The central government took an extra piece of increments. 1: 03 coefficient, the longer the time, the less you take. According to the formula, it tends to be infinitely small in the end, but it will never intersect. Ten years after the implementation of the tax-sharing system, the local government has not been able to get 1:03, and now it is only about 0.1.

Assuming that in 1993, the 3/4 of the value-added tax of a province was 1 billion, which did not move. In 1993, 1 billion was taken and returned 1 billion to the local government. By 1994, the growth rate of this 1 billion may be 10%, that is to say, the actual receipt of 1.1 billion, these 11 countries The tax bureau took it away. How much should I return to the place? According to the 1993 base of 1 billion yuan multiplied by 3% (1: 0.3), it will increase by 1, and give you 0.3, so it will be returned to the local government of 1.03 billion yuan. The central government took 70 million yuan.

Premier Zhu said to the comrades of the Hebei Provincial Party Committee and the Department of Finance: This kind of reform is a very moderate reform, and the local vested interests are not damaged, and what is returned is not a "dead face", but a piece of "fa noodles".

This is the "win-win" scheme designed by the tax-sharing system: recognize that all local tax bases are returned, the central and local governments share the growth of value-added tax according to the ratio of 75:25, and encourage local income increase according to the 1:0.3 coefficient return method. These three principles have not changed since they were determined. Since then, a tax-sharing plan that conforms to China's national conditions has been introduced.

It should be said that this plan is not perfect, but it has tried to pursue the best under objective conditions at that time.

(Part III)

Local negotiations: 17 provinces in the south and the north

For more than two months from September 9 to November 21, 1993, Vice Premier Zhu led a brigade of more than 60 people, including comrades from the Sports Reform Office, the Ministry of Finance, the State Administration of Taxation, the Banking and other departments, mainly comrades of the finance and taxation system, flying all over 17 provinces, cities and autonomous regions, from far away. Near, the first stop is Haikou, and the last stop is Hebei.

In more than 70 days and nights, they first fully listen to the opinions of comrades in various provinces, do investigations and research, and carefully calculate the financial system accounts with the provinces. In each province, they understand the situation of many system changes in history. In addition, according to the 10 years after the ten-tax system, they predict how much money the central government will get from the local government. The proportion of local tax revenue. The result of this prediction determines the determination of the cutting line of the tax-sharing system. The central government can not only get the necessary increments, but also take into account the local affordability.

Negotiate with each province, and the comrades of the central government know the "reason" and action of building a socialist market economy

In order to take into account the overall situation and look forward, we will do everything we can to persuade all provinces to support the reform of the tax-sharing system. It can be said that it is bitter, sometimes swallowing anger, or both soft and hard.

In these two months, the original tax-sharing plan of the central government had to make a series of adjustments, compromises and concessions under the strong request of local governments. However, the implementation of the general principle of the reform of the national unified tax-sharing system has never wavered.

A stone stirs up a thousand waves

According to the rules of public policy formulation, when the goal of a major institutional innovation is determined, policymakers must comprehensively consider a variety of factors, one of which is to consider the interests between people, integrate the needs and realistic conditions of stakeholders, and predict the obstacles to the achievement of the goal. The final plan must be determined after consultation between the parties.

On July 23, 1993, Premier Zhu talked about the ideas of the Party Central Committee and the State Council on the reform of the tax-sharing system at the National Financial Conference. The news went on and on. On August 30, the central government came up with the first plan for the reform of the tax-sharing system, which was discussed and adopted at the meeting of the Standing Committee of the Political Bureau of the Central Committee on September 2. Soon after, I received a report written by the Guangdong Provincial Party Committee to the central government, asking Guangdong to implement the package alone.

The two main leaders of Guangdong went to Premier Zhu and talked for more than two hours. They asked Premier Zhu with a heavy heart, will Guangdong's special policy be implemented? If the package system is cancelled, shall we catch up with the "Four Little Dragons" in 20 years? They believe that if it is according to the method proposed at the financial meeting, Guangdong will not be able to do anything.

In addition to Guangdong, some provincial governors said in private that we will go to Premier Zhu to get their salaries in the future.

The situation is exactly the same as originally expected.

Entrusted by General Secretary jiangzemin and Premier Li Peng, Vice Premier Zhu will go to some provinces and regions to do explanation work. The basis of "explanation" is to calculate the tax comparison with each province.

On September 9, 1993, the brigade set out, and the first stop was Haikou. Why did you go to Hainan first? At that time, the Yangpu Development Zone held a customs closure ceremony and invited Premier Zhu to attend. However, Premier Zhu did not attend the reception, but went to the development zone to have a look. Relevant people who participated in the negotiations said that Premier Zhu's visit to Hainan was not the main purpose. He went to Guangdong, because Hainan's income was small and insignificant. He went to Hainan first to welcome the "negotiation" of Guangdong's "military training".

Sure enough, the two-day work is going well. Both the central government and Hainan believe that reform is necessary and opportunities should not be missed. Moreover, they also believe that the reform has no impact on Hainan's special policies, and the interests of Hainan have basically not been affected. If calculated according to the average annual growth of 30% of value-added tax, only 350 million yuan will be affected.

In addition to the base of 1995, Hainan Province has not put forward more requirements.

Although the trip to Hainan has enhanced confidence, Premier Zhu and his party know that the "hard battle" is behind.

The tortuous negotiations in Guangdong

Premier Zhu and his entourage came to Guangdong. As soon as I arrived, I immediately received the leaders of the provincial party committee and the provincial government. Comrades from the province clearly expressed their disapproval of the tax-sharing system.

A conference was held on the morning of September 13. All five sets of team members from Guangdong Province attended the meeting, and some leaders of some municipal committees also participated in the meeting. Premier Zhu first announced the decision of the Central Committee and said bluntly: This time, Comrade Tieying and I led the comrades of relevant ministries and commissions to Guangdong. It was entrusted by Comrade Jiangzemin and Comrade Li Peng to convey and introduce the financial system, financial system and investment system of the Party Central Committee and the State Council to the comrades. At the same time, we will discuss the implementation of the reform plan with comrades in Guangdong and settle accounts together.

He introduced the reform plan of the tax-sharing system to provincial government officials in detail, especially mentioning that Guangdong's understanding of the tax-sharing system plan was inaccurate, and pointed out that the current plan and the financial work conference had changed a lot. He talked about four questions: why to implement the reform of the tax-sharing system; what is the content of the tax-sharing system and how to do it; whether the reform of the tax-sharing system harms local interests; how much will Guangdong suffer from the implementation of the tax-sharing system. Everyone is listening carefully and memoring quickly.

Guangzhou in September is not as hot and humid as Beijing's autumn at this time. All the people from Beijing live in the tree-sgroved Pearl Island Hotel.

Before dinner, Premier Zhu called the Minister of Finance and the Director of the Local Budget Department to his room. Holding two forms given to him by Guangdong Province, the core content is that the system remains unchanged for 10 years and what the local financial resources are like. Within 10 years after the implementation of the tax-sharing system, the central government will take away more than 100 billion yuan from Guangdong. He said with a serious expression: It seems that the tax-sharing system can't go on. In the future, there will be so many increments of places. If Guangdong collapses and can't catch up with the "Four Little Dragons", it will become our crime. After that, he paced anxiously in the room.

The local director said to Premier Zhu: "According to the revised plan, the Guangdong account caliber is wrong, so the error is very large." Because the tax-sharing system has determined that the central and local governments will divide the value-added tax by 75:25, and will give local governments a growth rate. The central government of the tax-sharing system will take more financial resources from Guangdong, but keep the business tax. To the place, it will also bring corresponding increments to the place. Premier Zhu asked to make a calculation of the two systems for 10 years that night.

It's already 1 a.m., and Premier Zhu is still waiting. It is very difficult to make a 10-year tax calculation of the two systems. It is very difficult to add up the big and small taxes. They didn't sleep all night until the meeting in the morning. As a result of the final calculation, the financial resources taken by the central government from Guangdong are more than 30 billion yuan less, but after the tax-sharing system, the cake will become bigger, and the local financial resources will also grow more. Premier Zhu smiled at ease, because it would not affect the opening up of Guangdong and catch up with the "Four Little Dragons".

A wave of flattening and rising again. Guangdong further put forward four opinions. The core is to raise the issue based on 1993. They believe that Comrade Xiaoping's Southern Talk was in the first half of 1992, and the economic development in the second half of the year was reflected in fiscal revenue in 1993. If the results of Comrade Xiaoping's Southern Talk are not included based on 1992, how can this work? They insist that 1993 be the base year for the implementation of the tax-sharing system.

Premier Zhu was well prepared. Before he came to Guangdong, he asked jiangzemin for instructions. Jiangzemin has made up his mind that it is the decision of the central government to implement the tax-sharing system, and it is no longer possible to discuss whether to implement the tax-sharing system. Premier Zhu said at an internal meeting that as long as Guangdong agrees to establish a tax-sharing system and separate taxation, this article has been set. It is good for some places to make some compromises, and everyone is happy, otherwise the reform will not be done well. On the afternoon of September 14, at the internal meeting, he made it clear that for the four proposed by Guangdong, he could agree to two and deny two.

First, they asked to make the base according to 1993, and I agree. Because we have repeatedly said that we guarantee the current vested interests, this is 1993. Taking 1993 as the base, it makes sense. Of course, the central government takes less. Based on 1993, all provinces across the country will welcome it.

Article 4, they require the central government to treat key construction equally. As I said, not only can they be treated equally, but they can also be taken care of. Some people say that this is an empty check, but you can't ask me to sign it.

Articles 2 and 3 cannot be agreed. After the reform of the tax system and the tax-sharing system, the proportion of value-added tax must be unified throughout the country, and Guangdong cannot establish a different proportion. Article 3 proposes that the return growth rate should be determined according to the central revenue growth rate of Guangdong, and this article cannot be agreed. In fact, another thing is to agree to extend the tax reduction and exemption for another two years.

At this time, there was an episode. When Premier Zhu proposed that 1993 could be the base, Liu Zhongqi and Xiang Huaicheng of the Ministry of Finance disagreed. Their reason is also simple. First, they believe that they can only be based on the 1992 final accounts. Because the negotiation time is September 1993, and there are still three months to make a final account. The number has not come out. Taking 1993 as the base, the account is not easy to calculate, and it will not be clear until April or May 1994. Second, there is a big problem that each province has to deal with it. The base has been historical over the years and has never been predicted. The future. 1980 was based on the number of telegrams at the end of 1979, and 1985 was based on the final accounts of 1983. It used to be a static base, but this time I actually got a dynamic base.

Premier Zhu pointed to Xiang Huaicheng and said: Lao Xiang, isn't your Ministry of Finance just governing the world with the base? I can hear the callus in my ears.

For Liu Zhongqi and Xiang Huaicheng, despite their own opinions, they still accept the Prime Minister's opinions, because they are still facing the biggest unknown question, that is, whether Guangdong agrees to implement the reform of the tax-sharing system. Ten years later, Xiang Huaicheng said that I am not a modest person, but I still admire Premier Zhu. He has political courage.

At the meeting the next day, although Premier Zhu did not give Guangdong a final guarantee and promise, he only indicated that he agreed to the "personal opinion" based on 1993, which has made Guangdong overjoyed.

At the meeting attended by the leaders of ten provinces in central, south and southwest on September 29, the central leadership thought that everyone's opinions were very reasonable, and finally decided to take 1993 as the base.

It's really full of twists and turns. On September 15, Guangdong once again raised the question of whether to abolish the package system and implement the tax-sharing system. Premier Zhu replied, "As for whether Guangdong continues to implement the package system, I am not authorized to study this issue here, and I can't discuss the package here, otherwise I can't go back. I think it should be better for us to have a tax-sharing system than a package system, otherwise we will go backwards."

In the end, Guangdong was finally convinced. In this way, the money returned by the central government from Guangdong is equivalent to twice the amount it paid under the original system. What makes Guangdong happy is based on 1993.

After the event, Premier Zhu said when commenting on Guangdong: Generally speaking, the comrades in Guangdong finally took into account the overall situation and sacrificed part of their own interests in order to develop China's economy and complete the tasks assigned by the Party Central Committee.

Next, they still work in a province and a province.

Shanghai comrades "speak Beijing dialect"

After returning to Beijing from Guangdong, Vice Premier Zhu and his entourage embarked on a "negotiation" journey on September 25. This time they came to Altay, Xinjiang.

For the central and western regions, in addition to the goal of centralizing the central financial resources to be achieved in the reform of the financial system, another major goal is to narrow the financial gap between the east and the west. Comrade Jiangzemin talked about this issue at the economic work symposium in the northwest region. At that time, the different opinions of developed provinces were relatively strong. When the tax-sharing reform plan was announced at the National Finance Conference, it was all rich provinces and regions that raised objections. It is precisely those remote and poor provinces that give the central government the greatest support. They hope that the central government will become rich, and "the big river is full of water and small rivers."

In Xinjiang, Premier Zhu said that the reform of the tax-sharing system is beneficial to poor areas, and you should raise your hands in favor. But you can't be too anxious. It is impossible to benefit a lot at once. After the tax-sharing system, the central financial resources can be concentrated, and the support for ethnic areas can also be increased, but not yet. The reform of the tax system must be unified throughout the country. Your request to increase the proportion of value-added tax and consumption tax is unacceptable. The tax system must be unified, and no region can make a special one.

Originally, I thought that the western region would support the central government's tax-sharing system, but Xiang Huaicheng, then deputy minister of the Ministry of Finance, unexpectedly appeared. In September 1993, Comrade Jiangzemin held a film conference, also known as a symposium of six provinces. The governor of Guizhou stood up against the tax-sharing system and talked about the impact of the tax-sharing system on Guizhou. The meeting was attended by Jiangzemin, Premier Wen, zeng Qinghong, etc. No one thought that the backward areas would oppose the tax-sharing system. Xiang Huaicheng received a phone call from zeng Qinghong. He didn't even bring a change of clothes. He immediately rushed to Beijing Airport to take the last flight to the meeting place.

Why do some backward provinces oppose the tax-sharing system? This is related to the local industrial structure. Guizhou, Yunnan and Guangxi are all "tobacco and alcohol finance". These areas have been supported by "small tobacco" and "small wine" for a long time. At that time, it was decided

Consumption tax will be levied on cigarettes and wine. According to the design of the tax-sharing system, the increase of consumption tax is 100% at the central government. Obviously, these areas are at a loss. Later, the central government gave these provinces different care.

The trip to Shanghai was pleasant. In those days, Xiang Huaicheng had a discussion with Mayor Xu/Kangdi of Shanghai and comrades from the Finance and Taxation Bureau on Shanghai's fiscal revenue and expenditure, the tax-sharing system plan and related policies. After they checked the accounts together, they jointly confirmed Shanghai's fiscal expenditure and various basic data in 1992, and the 1993 fiscal The forecast of income is also basically the same, and a consistent view has been reached on the calculation caliber of Shanghai's handover to the central finance, as well as the problems in the tax-sharing plan and related policies. Xiang Huaicheng said: The reconciliation is carried out in a harmonious atmosphere of full understanding, mutual trust and mutual understanding. The basic common point between the two sides is unity and concerted efforts to implement the strategic intention of establishing a socialist market economy system. Comrade Shanghai fully understands the spirit of the central government's implementation of the tax-sharing system and gradually increasing the central government's financial resources in order to concentrate on several major events, or the central government's strategic intention to better support the economic development of the central and western regions when it has the strength. He believes that Shanghai has made a significant contribution to the national finances for a long time. Shanghai's revenue handed over to the central government ranks first in the country. After the implementation of the tax-sharing system, the central government's revenue from Shanghai still ranks first in the country, so Shanghai's contribution to the country is very large.

Premier Zhu told the people around him that he "does not work" in those days because he had worked in Shanghai. He just listened to the report, talked to someone, and did not participate in specific opinions. When he was about to leave Shanghai, he praised the high level of Shanghai comrades at the conference. He said that Wu Bangguo and Huang Ju not only fully represent the interests of Shanghai's development, but also grasp the principle of maintaining the overall situation from the overall interests of the country. He said: In the end, the Shanghai comrades all "speak Beijing dialect" and speak very well.

At the beginning of implementation: solving problems

Unforgettable beginning of 1994

The hard ice has been broken and the waterway has been opened, but this is a sea that no one has explored. Is it dangerous? After the implementation of the tax-sharing system in early 1994, this was the situation faced by scheme designers and implementers.

People's worries have begun to become more and more specific: is there no omission in the tax-sharing plan? Which parts of the plan are not perfect? What unpredictable situations will happen? Liu Zhongqi spent that period of time with this mentality.

The first problem encountered is that after the operation of the tax-sharing system, the tax is first entered into the central treasury and then divided into the local government, plus the 0.3 coefficient of return will be until the end of the year. When the local government uses the money, Liu Zhongqi immediately asked the local budget department to set the proportion of fund scheduling. After determining the formula, the central government returned it to the local government according to the proportion of the state treasury.

He once told his colleagues without worries that there are three things to implement the tax-sharing system. If one of them happens, I, the minister, will have to step down. What is he worried about? First, will the tax-sharing system promote inflation? That is to say, the tax rate of the design scheme is higher than the original, and enterprises must pass on the cost to consumers. Second, if the tax system is unreasonable, it does not stimulate production, but hits production, and economic growth will go down. Third, enterprises do not understand this new method. Although large-scale training has been completed, the tax levy The management personnel don't understand, and it's hard to say whether the money can be collected. Xiang Huaicheng also said that he couldn't sleep until February 8, 1994.

Liu Zhongqi said: "I am more confident in terms of the plan. In terms of practical operation, I am very worried that the people who are responsible for the actual operation do not understand. Because the calculation of value-added tax is different from the original product tax, and because it is designed while training personnel, I am always worried.

In order to understand the actual situation, before the Spring Festival, Liu Zhongli often went to various places, shopping malls and enterprises, as long as there is tax, he will go to see if the accountant will use a new method to make accounts. He was relieved after reading it. In order to prevent accidents, Minister Liu borrowed 12 billion yuan from the Central Bank and put it in the treasury for a quarter. He was worried that he could not collect money, but the state still had to spend. Xiang Huaicheng said, "On February 8, 1994, I remember clearly that it was the thirtieth day of the twelfth lunar month, and the tax figures in January came up. Revenues increased by 61% month-on-month in January. I'm indescribably happy."

Liu Zhongqi got the news while inspecting the work of the Beijing Taxation Bureau. Xiang Huaicheng said to Minister Liu Zhongli, "Minister, the tax revenue has increased by 61%, and we have got 18 billion yuan. We can take a breath."

"Later, in February, March, April to December, the tax revenue increased every month, and the annual tax revenue increased by more than 90 billion yuan, and since then it has reached a big step." Xiang Huaicheng said.

Xiang Huaicheng said that as soon as the report came out, they immediately told Deputy Prime Minister Zhu Rongji that his reaction was different from ours. He was not happy, and everything that happened seemed to be expected by him.

By 1997, 1998 and 1999, the national fiscal revenue increased by nearly 100 billion yuan per year.

Since the implementation of the tax-sharing system, after ten years, the fiscal plate has increased from 434.9 billion yuan to 200 billion yuan (expected figures in 2003). It should be said that the tax-sharing system is successful.

The surge in local taxes has panicked the Ministry of Finance

In 1993, the national local fiscal revenue increased by 39.9% compared with 1992. Among them, Shandong increased by 39%, and the revenue reached

to 19.3 billion yuan; Jiangsu increased by 45.3%, with income reaching 22 billion yuan; Fujian increased by 46.9% to 11 billion yuan; Shanghai increased by 32.3% to 23.2 billion yuan; Anhui increased by 32.8% to 7.3 billion yuan; Jiangxi increased by 30.8%, reaching 6.6 billion yuan; Guangzhou East increased by 56% to 34.6 billion yuan; Sichuan increased by 42.2% to 20.1 billion yuan. Zhejiang increased by 38.6% to 16.66 billion yuan. As the central government decided to take 1993 as the basis in late September, the tax revenue growth in September was 60% higher than the previous year, 80% in October, 90% in November and 120% in December.

The concerns at that time have now been confirmed. Revenue rose sharply in September 1993. The revenue from October to December increased by more than 60 billion yuan compared with last year, and the fiscal revenue increased by more than 90 billion yuan that year.

In a few months, local taxes suddenly increased by 50-60%, and the Ministry of Finance panicked. According to the normal situation, local governments pay an increase of about 20 billion yuan to the central government every year. At the National Financial Work Conference in 1993, it was hoped that the revenue would exceed 30 billion yuan. If all these are returned, the central abacus will fail. Is the place tamping? No one can tell how many normal and abnormal situations there are, because with 1993 as the base, all the part of the increase in income in 1993 will eventually be returned to the local government.

At that time, the first measure taken by the Ministry of Finance was to organize working groups to go to relevant provinces and cities to check the authenticity of the 1993 income, and try to squeeze out the water by cleaning up the false collection of over-taxes and other means, and compress the return base of 30 billion yuan. The actual inspection results are not ideal.

Why can't you find it out? Local protectionism has developed to a very serious level, and the means of inspection are very primitive. In order to raise the base, there are many high tricks in the place. For example, an enterprise was originally contracted, and the tax payment has been reduced or exempted. Now he is asked to pay the tax, raise the base, and return it privately after paying it. For another example, take dead arrears and accumulated arrears as the base. What is dead debt? That is, an enterprise has closed down and has never paid taxes. Now it pays taxes by transferring money or borrowing money from the bank, which raises the base. In addition, Yin ate Mao grain, collected too much tax, collected next year's tax this year, and raised the base very high. It's not easy to do this. First, the Department of Finance needs to come up with ideas, second, it needs the approval of the governor and mayor, third, it requires the bank to take the money, and fourth, the enterprise is willing to back debt, and only through each joints can it.

Premier Zhu is very angry about this matter. He believes that the provincial mayor can't do this kind of thing, and only the finance director will come up with such a bad idea. He pointed to the director of the Finance Department in Hebei and said, "Please make an appointment with your subordinates three rules. Don't come up with bad ideas. Don't be false. Everyone is well-behaved and realistic. As long as you really increase your income, I will definitely return it. I will definitely give you the reduction base or the increasing proportion of reduction. How much you can reduce depends on how much you can receive. If you overdo the first tax and collect next year's tax this year, at that time, not only will it not be returned, but I also need to check the tax ticket. As long as it is found out, a few people must be withdrawn, and even criminally punished. However, it's okay for you to collect the taxes you owe for more than ten years. Because it is owed before, it cannot be returned as a base.

Another reason that cannot be ignored was said by the director of the Department of Finance of Zhejiang Province. That is, since the reform and opening up, the policy of tax reduction and profit concessions has been implemented for a long time, and the social savings are relatively rich in tax sources. Therefore, as long as taxes are levied in accordance with the law, it is not surprising that the proportion of tax growth is higher than that of normal years.

Indeed, in the second half of 1993, local leaders at all levels were focusing on the economy, and the economy could ensure tax revenue, and even the finance gave tax money to let them pay taxes.

The way out of the 30 billion budget gap

How to solve the budget gap of about 30 billion yuan in the central government in 1994 has become the biggest problem in the first year of the tax-sharing system. What is 30 billion yuan? After calculations, the Ministry of Finance found that of the new revenue of more than 90 billion yuan in 1993, the proportion of the base that the central government wants to return to local governments is too large, and the proportion of the central net income does not meet the predetermined requirements. If they are all returned to local governments, there will be 30 billion holes in the 1994 fiscal budget. It is preliminarily estimated that the return base to the local government will be reduced by about 30 billion yuan, accounting for about 1/3 of the total increase in revenue. It can only be determined through inspection and verification. However, the large inspection team returned from the beginning of the year to the end of April and failed to find any false increase. At this time, 30 billion yuan became a big headache in the implementation of the 1994 budget.

After repeated research and discussion, the Ministry of Finance has come up with three sets of solutions to solve 30 billion yuan. First, tax revenue growth is linked to local GDP growth rates; second, 30 billion yuan is deducted according to the base growth rate of each province; third is to look forward and admit The 1993 base reported by Fang increased by 16% on this basis.

From July 13th to 15th, 1994, the Ministry of Finance held a symposium for the director of the financial departments of 11 provinces and cities, including Beijing, Shanghai, Zhejiang, Jiangsu, Liaoning, Hubei, Guangdong, Yunnan, Hei, Shaanxi and Dalian, which has just been built in Beijing. Lord Liu Zhongqi made a report for more than an hour and put forward the problem of solving the problem of excessive return base, that is to say, what to do with this 30 billion yuan hole. He asked everyone to brainstorm and study solutions.

The director of the Zhejiang Department of Finance made a speech, believing that the Ministry of Finance's implementation of the method of deducting the base for provinces and cities seems to lack the basis, and believes that the Ministry of Finance is a good way to look forward with one heart and one mind to solve the goal of increasing taxes in provinces.

Representatives from Shanghai, Guangdong, Jiangsu and Shandong Province agreed with the opinion of the Department of Finance.

As for how to issue the central "two taxes" growth index, there are two different opinions: one is linked to the GDP growth ratio of provinces; the other is linked to the growth rate of "two taxes" of provinces in 1993. The first opinion is that because GDP itself has moisture, if the absolute amount of GDP is linked, there will be a "shrinkage" problem, which may cause the feeling that China's national economy can't go up abroad. Its side effects are too great, especially the requirements of Deng Gong to improve the national economy, and the financial department's own political risks. It's too big. The second opinion is that it is more reasonable. In 1993, the growth rate of provinces and cities that benefited more was relatively higher. We should undertake more tasks to make the fiscal revenue cake bigger and contribute more to the central government.

During the meeting, Minister Liu Zhongqi of the Ministry of Finance, Vice Minister Jing Ren Qing and other leaders and Comrade Xiang Huaicheng, who presided over the work of the State Administration of Taxation, reported the requirements of the symposium to the leaders of the State Council, and the leadership principle of the State Council agreed with everyone's opinions. After the continuous enrichment and adjustment of the National Financial Work Conference in August 1994, the National Budget Symposium in Zhongshan, Guangdong in October and the National Financial Work Conference in December, four opinions have been formed:

First, the national target is one-third of the "two taxes" growth rate in 1993, that is, 16%, and the provinces target 1/3 of the province's growth rate in the previous year. Second, provinces and cities that can't complete the task of increasing the "two taxes" will compensate with local income, and if they can't complete the previous year's base, the return base will be deducted. Third, in all regions that have completed the "two taxes" growth target, the central government will return its tax return base at 1:0.3 of the "two taxes" growth rate of the region in that year. In areas where the "two taxes" income exceeds the growth target, the excess part will be given a one-time reward, and the return coefficient will be increased from 1:0.3 to 1:06. Fourth, l: The return coefficient of 0.3 is no longer linked to the national average "two taxes" growth level, but to the province's "two taxes" growth.

The effect of this decision was shown later. If we really started to drain the water that year and cut the return base of each province by 30 billion yuan, it would not be possible to increase the annual tax revenue of more than 100 billion yuan from 1994 to 1997. The reform of China's finance and even the entire fiscal and taxation system will be another face.

End: Ten years later, at the symposium held in Zhuozhou, Hebei Province, most experts believed that from 1994 to 2002, China's fiscal revenue increased by an average annual rate of 17.5%, and the proportion of fiscal revenue to GDP increased from 12.6% in 1993 to 18.5% in 2002; Central Fiscal revenue accounted for 55% of the national fiscal revenue, an increase of 33 percentage points compared with 1993 before the reform. In 2002, in addition to tax rebates and institutional subsidies, central local transfer payments reached 401.9 billion yuan, 8.6 times that of 1995, with an average annual growth rate of 36%.

But experts also believe that the innate shortcomings of this system and the new problems that emerged in the operation later cannot be ignored. In the ten years of the operation of the tax-sharing system, we should not only summarize experience, but also face the various problems that exist and occur in the operation. Therefore, deepening and improving the tax-sharing financial system is a very important and urgent research and solution problem faced by theoretical experts and tax workers.