Government Finance
Government Revenue refers to the revenue of the
government finance by means of participating in the distribution of the social
products, which is the financial resources for ensuring the government to
function. The contents of government revenue have been changed several times.
Now it includes the following main items:
(1)
Various tax revenues, including value added tax, business tax, consumption tax,
land value added tax, tax on city maintenance and construction, resources tax,
tax on use of urban land, enterprise income tax, personal income tax, tariff,
stamp tax on security transactions, tax on purchase of motor vehicles, tax on
agriculture and animal husbandry and tax on occupancy of cultivated land, etc.
(2)
Special revenues, including revenues from the fee on sewage treatment, fee on
urban water resources, fee for the compensation of mineral resources and
extra-charges for education, etc.
(3) Other
revenues, including revenue from interest, revenue from the repayment of
capital construction loan, revenue from capital construction projects, and
donations and grants.
(4)
Subsidies for the losses of the state-owned enterprises. This is an item of
negative revenue, consisting of subsidies to industrial, commercial and grain
purchasing and supply enterprises.
Government Expenditure refers to the distribution and
use of the funds the government finance has raised, so as to meet the needs of
economic construction and various causes. It includes the following main items:
(1)
Expenditure for capital construction: It refers to the non-gratuitous use and
appropriation of funds for capital construction in the range of capital
construction, outlay of capital as well as the loans on capital construction
approved by the government for special purpose or policy purpose and the
expenditure with discount paid in an overall way within the amount of the funds
appropriated to the departments for capital construction.
(2)
Innovation funds of the enterprises: They refer to the funds appropriated from
the government budget for the enterprises to tap the latent power, upgrade the
technology and carry out innovation, including the innovation fund of the
departments, loan of the enterprises for innovation, subsidies on the
innovation of the small fertilizer plant, small cement plant, small coal mines,
small machinery plant and small steel plant, the expenditure of interest for
the loan for innovation.
(3)
Geological prospecting expenses: They refer to the expenses appropriated from
the government budget to the geological prospecting units for the expenditure
of the prospecting work, including the expenditures of the administrative
agencies for geological prospecting and their institutional units as well as
the geological prospecting expenditure.
(4) expenditures
for science and technology promotion: They refer to the expenses appropriated
from the government budget for the scientific and technological expenditure,
including new products development expenditure, expenditure for intermediate
trial and subsidies on important scientific researches.
(5)
Expenditure for supporting rural production: It refers to the expenditures
appropriated from the government budget for supporting the various expenditures
of the rural collective units or households for production, including the
subsidies to the small water conservancy projects and well drilling, sprinkling
irrigation projects run by the villages; subsidies on the rural water and soil
conserving measures; subsidies to the small power stations run by the villages;
subsidies to the expenditure for fighting against particularly severe draughts;
subsidies on the rural waste land exclamation; fund for supporting the township
enterprises; fund for supporting rural cooperative production organizations,
subsidies to the expenditure for popularization of the agricultural
technologies and plant protection in the rural areas; subsidies to the
expenditure for the protection of grasslands and cattle and fowls; subsidies on
afforestation and forest protection in rural areas;
subsidies on the rural aquatic products industry; special fund for developing
grain production.
(6)
Operating expenses of the departments of farming, forestry, water conservancy
and meteorology etc.: They refer to the expenses appropriated from the
government budget for the expenditures of agricultural exclamation, farms,
agriculture, animal husbandry, agricultural machinery, forestry, timber
industry, water conservancy, aquatic products industry, meteorology, technology
popularization in township enterprises, popularization (demonstration) of
improved varieties, plant (cattle and fowls, forest) protection, water quality
monitoring, prospecting and designing, resources investigation, cadres
training, subsidies to horticulture gardens, expenditure of specialized secondary
schools, subsidies on the experiments of sowing herbage seeds by flights,
expenditures of afforestation agencies and
meteorology agencies, expenses for fishery administration and operating
expenses for agricultural administration, etc.
(7)
Operating expenses of the departments of industry, transport and commerce: They
refer to the expenses appropriated from the government budget to cover the
expenditure on salaries and operational expenditure of the departments of
industry, transport and commerce for the expenditure of business development,
including expenses for prospecting and designing, expenditures of specialized
secondary schools, expenditures of the technical training schools and
expenditures for cadres training, etc.
(8) Operating expenses of the departments
of culture, education, science and public health: They refer to the expenses
appropriated from the government budget for the expenditures on salaries and
operational expenditure of the causes of culture, publication, cultural relics,
education, public health, traditional Chinese medical science, free medical
services, sports, archives, earthquake, ocean, communications, broadcasting,
film and television, family planning; expenditure for training of cadres of
government, party and mass organization; expenditures for natural sciences,
social sciences, associations for science and technology and the special
expenditure for the high-tech researches. They include mainly wages, extra
wages, welfare funds, pension for the retirees, stipend, expenses
for official business, expenses for equipment purchases, expenses for repairs,
business expenses and subsidies to the units which are unable to support their
expenditures by their own earnings.
(9)
Pension for the disabled or for the families of the bereaved and relief funds
for social welfare: They refer to the funds appropriated from the government
budget for the expenditures of pension for the disabled or for the families of
the bereaved and relief funds for social welfare, including the lump-sum or
regular pension paid by the departments of civil affairs to the members of
martyrs families and families of those who died for the public interest,
pension to the revolutionary disabled, subsidies for permanent disability of
various kinds, subsidies to the military martyrs dependents and the demobilized
servicemen, expenditure for settling down the demobilized servicemen, operating
expenses of the consoling institutions, expenses for management and repair of
the commemorative buildings for the martyrs, the expenses managed by the
departments of civil affairs for the retirees and those who have quitted their
work, expenses for social relief in rural and urban areas, operating expenses
for providing relief to the areas of natural calamity and subsidies on the
reconstruction after the particularly severe natural calamities, etc.
(10)
Expenditure on retirees: It refers to the expenditure on retirees of government
agencies and institutions that are covered by the state budget.
(11)
Expenses on subsidies to social security system: It refers to expenditure from
the state budget for subsidies to social security system, including subsidies
to the social insurance fund, subsidies to promoting employment, subsidies to
laid-off workers of state-owned enterprises, supplement to national social
security funds, etc.
(12)
Expenditures for national defence: They refer to the
funds appropriated from the government budget for the expenditures for building
up national defence and safeguarding national
security, including expenses of national defence,
expenses of scientific researches on national defence,
expenses for building up peoples militia and expenditure for special projects,
etc.
(13)
Administrative expenses: They include expenditure for administration, subsidies
to the parties and mass organizations, diplomatic expenditure, expenditure for
public security, judicial expenditure, law court expenditure, procuratorial expenditure and subsidies to the expenses for
treating the cases by the public security departments, procuratorial
organs and law courts.
(14)
Expenditure on policy-related subsidies: It refers to the expenditure
appropriated, with the approval of the government, from the state budget for
price subsidies on such products as grain, cotton and edible oil. More
specifically, it includes subsidies to the difference between the selling
prices and purchasing prices of grains, cotton and edible oil, subsidies for
curtaining prices and for sugar reserve, subsidies to the difference between
the selling prices and purchasing prices of means pf agricultural production,
risk fund for grains, risk fund for non-staple food, risk fund for local
production of coal, etc.
(15)
Expenditure on interest of debts: It refers to expenses from the state budget
on paying interest of domestic and foreign debts.
Revenue of the central government and
revenue of the local governments: refers to
the revenue of the central government and that of the local governments as
defined by the decentralized taxation system starting from 1994. In accordance
with this system, the revenue of the central government includes tariff,
consumption tax and value added tax levied by the customs, consumption tax,
income tax of the enterprises subordinate to the central government, income
taxes of the local banks, foreign-funded banks and non-bank financial
institutions, business tax and profits of railways, head offices of banks, head
office of insurance company , which are handed over to the government in a
centralized way, tax on city maintenance and construction, tax on purchasing
motor vehicles, tonnage tax of ships, 75% of the value added tax, 94% of the
tax on stock dealing (stamp tax), interest income tax in the personal income
tax, proportion of the personal income tax (other that interest income tax) to
be shared by the central government, and tax on ocean petroleum resources,. The
revenue of the local governments includes business tax, income tax of the
enterprises subordinate to the local government, proportion of the personal
income tax (other that interest income tax) to be shared by the central
government, tax on the use of urban land, tax on the adjustment of the
investment in fixed assets, tax on town maintenance and construction, tax on
real estates, tax on the use of vehicles and ships, stamp tax, slaughter tax, tax
on agriculture and animal husbandry, tax on special agricultural products, tax
on the occupancy of cultivated land, contract tax, value-added tax on land,
income from charges on use of state-owned land, 25% of the value added tax, 6%
of the tax on stock dealing (stamp tax) and tax on resources other than the
ocean petroleum resources.
Expenditure of the central government
and expenditure of the local governments: according to the different functions of
the central government and local governments in the economic and social
activities, the rights of affairs administration are classified between the
central government and local governments; and the classification of the
expenditure between the central government and local governments are made on
the basis of the classification of the rights of affairs administration between
them. The expenditure of the central government includes the expenditure for
national defence, expenditure for armed police
forces, the administrative expenses and various operating expenses at the level
of central government, expenditure for key projects and the expenditure of the
central government for adjusting the national economic structure, coordinating
the development among different regions and exercising the macro-economic regulation
and control. The expenditure of the local governments includes mainly the
administrative expenses and various operating expenses at the level of local
governments, the expenditure for capital construction and technological
innovation with the funds raised by the local government, expenditure for
supporting rural production, expenditure for city maintenance and construction
and expenditure for price subsidies, etc.
Extra-budgetary revenue and
expenditure Extra-budgetary fund refers to financial
fund of various types not covered by the regular government budgetary
management, which is collected, allocated or arranged by government agencies,
institutions and social organizations while performing duties delegated to them
or on behalf of the government in accordance with laws, rules and regulations.
It mainly covers following items: administrative and institutional fees,
governmental funds and extra charges that are stipulated by laws and
regulations; administrative and institutional fees approved by the State
Council and provincial governments and their financial and planning (price
management) departments; governmental funds and extra charges established by
the State Council and the Ministry of Finance; funds turned over to competent
departments by their subordinate institutions; self-raised and collected funds
by township governments for their own expenditure; and other financial funds
that are not covered in budgetary management. Social security funds are treated
as extra-budget fund and managed for its exclusive use, given the circumstance
that separate government budgetary system for social security is yet to be
designed. Special accounts are opened by the financial departments in banks for
the management of revenue and expenditure of extra-budgetary fund.
Extra-budgetary revenue and expenditure is managed separately, namely, revenue
of institutions and departments must enter into the special accounts of the
financial departments at the same administrative level, and their
extra-budgetary expenditure is arranged in line with the extra-budget plans and
appropriated from these accounts.
Revenue
from debts refers to fund raised
by the state in credit forms, including various domestic government bonds
issued by the Ministry of Finance to commercial banks and other investors,
bonds in foreign currencies issued by the Ministry of Finance at the
international capital market, and other foreign debts borrowed and to be repaid
centrally by the government finance.
Expenditure
on repayment of principal of debts refers
to the expenditure from government finance on the repayment of principal of
domestic and foreign debts.
Deficit
of central government finance refers to the
difference between the total expenditure and the total revenue of the central
government.