The "three increases and three cuts" in the budget report: this year's tax cuts and rebates are about 2.5 trillion yuan, and the central general public budget to local transfer payments has increased by 18%
How can fiscal policy support the steady growth of China's economy?
On March 5, the Fifth Session of the Thirteenth National People's Congress opened. The Ministry of Finance requested the Congress to review the "Report on the Implementation of the Central and Local Budgets in 2021 and the Draft Central and Local Budgets in 2022" (hereinafter referred to as the Budget Report).
On March 6 and 7, the 37-page "state ledger" was reviewed by delegates at a delegate group meeting.
Like the government work report, the budget report is also the highlight of the two sessions every year.
The reason why it attracts attention is because the whereabouts of "money" reflects the focus of macroeconomic policies in the new year and the focus of the country's governance.
Especially this year, the new crown epidemic has entered its third year. After the "one low and one high" in the previous two years, China's economic growth is expected to achieve a "soft landing" this year and complete the expectation of "GDP growth of about 5.5% year-on-year". Target.
However, the external environment is severe and complex, and the internal pressure is "triple pressure". How should fiscal policy and monetary policy be coordinated, and what reserves are in the policy toolbox, more attention is paid.
A reporter from the Beijing News sorted out the "three increases and three cuts" in the budget report, trying to clarify how fiscal policy supports the "steady growth" of China's economy.
Tax reduction and increased cash flow of manufacturing and small and micro enterprises
Tax and fee reduction is an important measure to implement a proactive fiscal policy and support the bailout and development of market players, and it is the most beneficial policy for enterprises.
The budget report uses nearly a full page to detail this year's tax and fee reduction policies, showing the "more" and "detailed" policies.
The budget report proposes that this year's tax rebate will be about 2.5 trillion yuan.
For the part of tax reduction, we will continue to implement some policies of tax reduction and fee reduction, increase the range of reduction and exemption, and expand the scope of application. It is estimated that the burden will be reduced by about 1 trillion yuan.
For the tax rebate part, a large-scale tax rebate will be implemented for the remaining tax credit this year, with an estimated scale of 1.5 trillion yuan.
Minister of Finance Liu Kun said in the "Minister's Channel" of the "Two Sessions" on March 5 that the scale of tax reduction of about 2.5 trillion yuan this year is the highest in history, and tax reduction and tax rebate are implemented simultaneously. With a cash flow of 1.5 trillion yuan, manufacturing, small and micro enterprises and individual industrial and commercial households will be the main beneficiaries.
According to the policy arrangement, the tax refund will give priority to small and micro enterprises. The existing tax credits for small and micro enterprises will be refunded in one go before the end of June, and the incremental tax credits will be refunded in full.
At the same time, we will focus on supporting the manufacturing industry and solve the problem of tax refunds in industries such as manufacturing.
Shi Zhengwen, director of the Fiscal and Taxation Law Research Center of China University of Political Science and Law, told reporters that the new combined tax and fee support policy is implemented this year, and the "new" is reflected in not only tax reduction, but also tax rebate, and the scale of tax rebate is larger. No.
Shi Zhengwen believes that the tax rebate measures will directly expand the benefits of tax and fee reduction policies.
He explained that tax reduction must come first, and many companies have no profits under the epidemic, so they do not need to pay income tax, so there is no tax reduction.
This is the reason why we have obviously reduced a lot of taxes, but some companies still feel that they do not have a strong sense of gain.
"The tax rebate solves this problem. Some companies have no profits now, but they still have stock in the past. This time, the tax refund of these stocks can fundamentally solve the cash flow problem of the company. Many companies did not fully enjoy the tax reduction in the past. Enterprises with tax reduction and fee dividends can also enjoy this time." Shi Zhengwen said.
Although the tax reduction part is a continuation of some of the previous policies, due to the expansion of the reduction and exemption range and the scope of use, it has also brought more benefits to market players.
For example, for small and micro enterprises with an annual taxable income of 1 million yuan to 3 million yuan, on the basis of the current preferential policies, the corporate income tax will be halved, "equivalent to a tax rate of only 5%." Shi Zhengwen said.
Reduce central sector spending and increase transfer payments to local governments
According to the budget report, the central government's expenditure this year is 3.557 trillion yuan, an increase of 3.9%.
The central government's expenditure at its own level "returned to positive" for the first time after "negative growth" was arranged for two consecutive years.
Still, central sector spending remained negative, down 2.1% this year.
The budget report proposes that the central department should take the lead in living a tight life, and on the basis of strictly controlling the expenditure of the central department for many years, continue to reduce the expenditure of non-rigid and non-key projects, and strive to reduce the cost of administrative operation.
The freed up financial resources focus on ensuring rigid and urgently needed expenditures.
At the same time, in order to meet the needs of departments to perform their duties, education and science and technology are not included in the scope of reduction.
At the same time, the central government has significantly increased transfer payments to local governments this year. According to the budget arrangement, the central government’s general public budget has made transfer payments to local governments of nearly 9.8 trillion yuan, an increase of about 1.5 trillion yuan, or an increase of 18%, a substantial increase over previous years. Fiscal expenditure growth reached 8.9%.
Shi Zhengwen believes that the main purpose of the substantial increase in local transfer payments is to promote the sinking of financial resources. Under the epidemic, the grassroots are facing greater and more practical difficulties, and more financial funds are needed to support the localities to do a good job of "three guarantees" at the grassroots level and improve basic people's livelihood. , to support the development of market players, and the direct funding mechanism launched in the past two years is all for this purpose.
On the "Minister's Channel", Liu Kun also talked about this issue. This year's large-scale tax reduction measures will reduce local revenue, and the substantial increase in transfer payments to local governments is also to help local governments ease the pressure on revenue reduction.
Risk reduction enhances fiscal policy sustainability
Calculating the "general ledger", the estimated revenue of the central general public budget in 2022 is 9,488 billion yuan, plus the transfer of 276.5 billion yuan from the central budget stabilization fund, and the transfer of 990 billion yuan from the central government fund budget and the central state-owned capital operation budget. The total amount is 10754.5 billion yuan; the central general public budget expenditure is 13404.5 billion yuan.
When the total revenue and expenditure are balanced, the central budget deficit is 2,650 billion yuan, 100 billion yuan less than in 2021.
The deficit rate was around 2.8%, a slight downward revision.
The reporter noted that this is the first time the deficit rate has "shrinked" since the outbreak.
Shi Zhengwen analyzed that before the epidemic, my country's deficit rate had been kept within 3% and 3%. In order to cope with the impact of the epidemic and increase fiscal expenditure, the scale of my country's deficit has increased since 2020, and it has exceeded 3% in the past two years.
This year, the deficit rate has returned to less than 3%, which is also to prevent and defuse risks and maintain the sustainability of fiscal policy.
As a key indicator to measure the activeness of a country's fiscal policy, the deficit rate is lowered. How to implement the active fiscal policy?
According to the budget report, although the deficit rate has been lowered, the scale of fiscal expenditure continues to expand. The national general public budget expenditure arrangement is 26.71 trillion yuan, an increase of more than 2 trillion yuan over last year, an increase of 8.4%. The available financial resources have increased significantly, and an appropriate expenditure intensity can be maintained. , it can be seen that the aggressive fiscal policy has not been reduced.
Lian Ping, chief economist of Zhixin Investment, analyzed that the deficit rate of about 2.8% has decreased compared with last year (3.2%), which is conducive to maintaining the sustainability of fiscal policy; but the overall deficit scale has further expanded, and fiscal expansion has not decreased. In fact, it can have a stimulating effect of about 3.8% of the deficit rate. Protecting people's livelihood, employment, and market entities is still an important force for fiscal policy.
While the deficit ratio has been appropriately lowered, the debt scale arrangement has also been highlighted as "reasonable". This year, the government's special bond issuance quota is about 3.65 trillion yuan, which is the same as last year.
"The special debt quota has not been increased, but it has remained the same as last year, which shows that we must prevent and control risks while maintaining investment. The government has set an example for stimulating the economy." Shi Zhengwen said.
Lian Ping analyzed that although the amount is the same as last year, with the special debt funds carried over last year of about 1.4 trillion yuan, the total of the two funds exceeds 5 trillion yuan, and the available funds in 2022 will be about twice that of last year. Maintaining greater strength can effectively drive investment in infrastructure and other aspects.
Regarding the relationship between risk and development, it is discussed in the budget report that the active fiscal policy in 2022 should improve the efficiency and pay more attention to precision and sustainability.
"It is necessary to enhance sustainability, coordinate needs and possible arrangements for fiscal expenditures, and insist on ensuring and improving people's livelihood during development. It is not good to have high ambitions and increase appetite... Effectively prevent and defuse risks."
This year, the new combined tax and fee support policy is implemented. The "new" is reflected in not only tax reduction, but also tax refund, and the scale of tax refund is larger, which was not available in the past.
- Shi Zhengwen
Although the quota (issued this year of special government bonds) is the same as last year, with the special debt funds carried over from last year of about 1.4 trillion yuan, the total amount of the two funds exceeds 5 trillion yuan, and the funds available in 2022 are about 2 trillion yuan last year. times, it still maintains a large intensity, and can effectively stimulate investment in infrastructure and other aspects.
- Lian Ping
Written by Jiang Huizi, reporter of Beijing News