Two decades of tax-sharing system reform in China:a comparative study

Two decades have passed since the Tax-sharing System Reform began in China.We discuss deep-seated problems in the financial management system.We contend that from the point of fiscal relations among different levels of government,the marked decline of the central government’s fiscal revenue as a share of the national total indicates that the macroeconomic regulation and control function of the central government has weakened;from the point of the form of fiscal revenue,the constant downward trend of the proportion of the tax revenue indicates that the old problem of excessive types of fiscal revenue forms have reappeared;from the perspective of tax structure,although the proportion of direct taxes has grown,turnover tax continues to account for the majority of tax revenue and the unbalanced dual-subject tax system has changed little,which indicates China’s tax structure has brought about stagnation.We believe that China’s tax reform should be incorporated into the medium-term fiscal planning in order to solve deep-seated problems in operation of the financial management system.