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Rational Thinking on Tax Jurisdiction

Chinese papers League finishing.
Abstract: how to scientifically and rationally divide the right of the central and local tax system reform of China's fiscal problems to be solved. In this paper, the right of our current tax system and tax division of the drawbacks start to make some Tax Jurisdiction should adhere to the principles, concepts and other problems should be solved.
Keywords: division of tax power tax distribution of public goods

1994, the formal implementation of the tax system in China, after 7 years of actual operation, the effect is significant, first of all it guarantees central and local fiscal revenue Synchronous growth; the initial establishment of the classification of tax collection and classification management system; make our tax administration system from a highly centralized system of gradual decentralization to the local proper direction. It is fundamental to overcome 80 years in the 20th century, under the conditions of a planned commodity economy, tax system set up some limitations. However, the immature market economy, it is premature children, inherent in a market economy has become increasingly sophisticated and integrated development of the world economy to today, its functions become increasingly unsuited to the developing economic environment, the most prominent manifestations Tax Jurisdiction is unreasonable and unscientific. Therefore, how to scientifically and rationally divide the right of the central and local tax system reform of China's fiscal problems to be solved. In this paper, the right of our current tax system and tax division of the drawbacks start to make some Tax Jurisdiction should adhere to the principles, concepts and other problems should be solved.
an existing tax in the tax division's abuses of power

1. Not conducive to the development of market economy

establish a sound market economic system is the goal of China's economic construction, it is our practice and experience, but also the trend of world economic integration requirements, we have to be a reform of any meet the requirements of market economy, tax division of the right should also be conducive to market economy. Current tax system according to the enterprise income tax by affiliation, that the central enterprises to pay corporate income tax to the central government, local enterprises pay corporate income tax to local governments. From the dynamic point of view, such an arrangement, the objective to encourage local economy, particularly through administrative means some local governments to force local businesses to sell products, exclusive products, acts of foreign enterprises tend to, or even result in some industries in some areas the central face of a business unfavorable competitive situation, encountered prejudice to the national market integration process. Which hinder the development of China's market economy.
2. Is not conducive to the implementation of the tax system

the tax system is generally exercised by the market economy a financial system. It is based on market economy principles and theory of public finance. It is the market economy the use of financial means to implement macro-control on the economy more successful approach. In accordance with the requirements of market economy, the Third Plenary Session of the Fourteenth Party made a decisive decision of the tax system in our country. Our current tax system in promoting the improvement and development of economic system play a positive role, but in practice the process has also exposed many problems, such as the Central disposable financial resources declined; central government deficit increased; central fiscal revenue growth below the growth of local revenue; central debt have been expanding; GDP, the proportion of tax revenue target not yet reached; local initiatives are not well mobilized. This is the right of the existing division of the tax revenue-sharing unreasonable are inseparable.
China is a centralized state, political unity and stability requirements, which determined that we can not by some Western countries to implement a federal system of decentralization. In addition, China is unbalanced economic and social development of a large country, the region's economic base, natural conditions, human geography is not the same situation, and even large gap, which determines our country can not be like Japan, France, Singapore and other countries, like the implementation of tax centralization of power concentrated in the central-type system. According to China's political system and economic and social conditions, mainly China should implement a centralized, rational form of decentralization to the local, the only way to make local taxes in the context of a more reasonable levy, without affecting the increase in central government revenues and strengthen macro-control ability. We have the right of the central and local division of the tax, the tax can not over-concentration of power in the central, can not expand without limit the right of local taxes. According to China's national conditions, scientific and rational division, thus ensuring the implementation of the tax system.
3. Contrary to public finance theory

deepening economic reform in China, especially in the Third Plenary Session of the Fourteenth Party proposed the establishment of socialist market economic system in the context of the Financial seize the opportunity to make academic establishment in China the subject of modern public finance. In 1998, China put forward the financial sector to gradually establish the basic framework of public finance reform objectives, the summer of 2000,[link widoczny dla zalogowanych], in the national financial work conference, Vice Premier Li, Xiang Minister's report, also the people Building outlines the new Public Finance in China mechanism of the basic ideas, key ministers report: try 3 to 5 years to establish a meet public needs, income and expenditure management practices, effective macro-control, in line with the requirements of the socialist market economic development, a new system of public finance. Efforts to build new mechanisms of public finance has become the main theme of China's financial reform, and its far-reaching to ignore.
of public finance that has the level of public goods, according to the size range of benefits can be divided into national public goods and local public goods. Public goods provided by the division of labor between central and local system of identification, is an economic mechanism design, it is necessary to provide nationwide by the central government public goods, local governments provide local public goods. Tax is the main source of public finance, tax revenue as the price of public goods, governments at various levels of public goods provided by the range of general jurisdiction and the limits of the level of government consistent. Therefore, the central and local provision of public goods, and should be relatively independent, and accordingly, the central and local taxes should have their own rights. Only the central and local governments the right to have their own taxes in order to ensure the basic needs of all levels of government spending in order to effectively improve the efficiency of government institutions. The right of our current tax system in the tax division is not clear, do not meet the requirements of public finance theory.
4. Not conducive to the mobilization of the central and local initiative

full play the enthusiasm of both central and local, long-term economic and social development in China adhere to a basic principle. December 15, 1993, ideas, but because of market economic system has not been fully established, in the actual implementation of the yet to be completely out of the limitations of traditional economic reform, the central concentration of the old tax power has not been completely eliminated. The implementation of the tax system, to some extent the financial resources to strengthen the central and strengthen the central macro-control, mobilize the enthusiasm of the Central. But far from the purpose of mobilizing the enthusiasm of both the local government's enthusiasm is far mobilized. One important reason for this is that taxes are too focused on the right, the tax law-making power, the power of interpretation, the right policy adjustments, tax relief is almost all attributable to the central power, neglect of local government in local affairs when dealing with the tax administration should have authority, The functions of the local government can not be fully realized, limiting local government initiative.
Furthermore, it is independent of the tax system does not give local governments the power to obtain revenues, particularly those with no independent power to levy taxes, but set by the central income tax system to organize the existing tax-sharing system, allocated to taxes to local government fixed income, 16 different kinds, but basically still not have their own independent local taxes. Like the existing local taxes have existed for decades, like local taxes, only sporadic small taxes, hardly enough to become the financial backbone of the local source of income. This negated the independence of local government finance the dominant position. Diversified pattern of economic benefits in the current context, if you do not take into account the local position of independent economic entities, simply place the interests of the target is equivalent to the central interests of the target, is not conducive to mobilizing the enthusiasm of local governments, and ultimately will also affect the ability of macro-control the interests of strengthening and implementation of the Central.
Second, the tax division should adhere to the principle of the right

1. Principle of market economy

establish a sound market economy is the goal of economic reform. In China, only the socialist market economy in order to give full play to the superiority of the socialist system, has won the competition with the capitalist system of comparative advantage; only the choice of market economy, resource allocation, in order to fundamentally improve the efficiency of resource use. Therefore, the right of the Central and Local Tax Division, must be conducive to the improvement and development of market economy is conducive to effective allocation of resources, and promoting economic development. Tax division of the right should be without prejudice to the market economy. We should also take into account the market also has its own weaknesses and negative aspects, where there is a market failure, therefore, countries must strengthen and improve macro-control on the economy.
2. Principle of efficiency

principle of efficiency, including two meanings, first, the principles of economic efficiency, the efficiency of the tax itself first principles. The principles of economic efficiency is Tax Jurisdiction and economic mechanisms for resource allocation to optimize the impact of running, that is, taxpayers in the normal burden, economic activity will not tax the right to be disturbed by unreasonable and obstacles, on the contrary also therefore be promoted. Therefore, we divide the right of tax, which taxes the right to fully consider the benefit the entire economy the central focus on the development of decentralization to the local tax which is conducive to economic development to mobilize local government initiative. The efficiency of the tax itself the principle refers to the minimum tax cost to get the most tax revenue. Reduce the tax costs, improve tax efficiency, the application of advanced scientific methods to manage the tax, to simplify the tax system, tax is necessary to facilitate the right of the central division of management and organization of income tax collection, but also facilitate the local income tax collection and management and organization, try to make convenience of taxpayers, save time, save trouble, the provincial costs.
3. Power and financial power of combining the principles of

powers, that is, some level of government have engaged in some economic affairs responsibilities and rights. Property rights owned by the Government that a certain level of financial management authority, including fiscal revenue and expenditure of the right to the right. In general, the central and local scientific and reasonable manner by the respective powers and powers reasonably determine based on the scale of expenditure, and expenditure in determining the scale of powers based on the division of property rights. Since reform and opening relations between central and local governments in China after several adjustments, in general, adjustment is still not in place, the central and local division of powers is still a lack of scientific and standardization, by not thorough enough, the phenomenon of passing each other have occurred.
we deal with central and local relations, by the time the central and local powers, legal procedures should be adopted to regulate the legal relationship between central and local governments, making it the central government and local governments must follow code of conduct, the relationship between the central and local processing law, should be based on the characteristics and level of public goods or benefits to define the scope of the central and local power and financial power. The mode of public finance, national, regional public goods theory by rational division of the central and local power and financial power to provide an objective basis, that local products provided by the local government, national public goods provided by the central government . The requirements of economic development from the market point of view, the central and local power and financial power of definition, according to various levels of government on economic and social affairs, ways and adapted to grasp the extent and consider the relationship between fairness and efficiency.
4. Revenue-sharing principles

adhere to the principle of the tax system, the key is to build the local tax system, to create the necessary conditions to further improve our revenue-sharing system so that with China's socialist market economy. Local taxes relative to the central tax purposes, the state's financial management system in accordance with the provisions of legislation by the central or local legislation introduced by the local responsible for the collection and management, fixed income tax for the various local government taxes in general. Local taxes are an important part of national revenue, which in addition to the three characteristics of national tax revenue, it also has all the income to the local, belonging to the local fixed-income financial, management, mainly by the local authority by the master, sources scattered, sporadic income, collection and management of difficult large, tax costs are high, close economic ties with the local features. The problem is the local tax system, accompanied with the implementation of revenue-sharing arising from, the tax system is a modern market economy, the country's basic approach, which improve the local tax system is inseparable from sound, there is no well-developed local taxes will not achieve the level of government a budget principles, promoting the standard tax system reform that is empty talk.
to establish a scientific and rational system of tax distribution, the local establishment and improvement of tax system must be referred to the agenda. Local tax system should be the main taxes stable, supporting tax sufficient, reasonable structure, complete functions of a combination of local taxes and more taxes. Establishment of local tax system, the local tax base lies in the choice and the establishment of taxes. We want to share in determining the central and local taxes, local taxes, establish the main taxes, such as sales tax, property tax, etc., in accordance with local economic development need to introduce some new local taxes, such as social security taxes, vehicle purchase tax, inheritance tax, gift tax, environmental tax, reform of the existing local taxes, such as personal income tax, urban maintenance and construction tax, property tax, resource tax.
three basic idea of division of tax power

1. Optimal tax structure

enhancing the tax structure is the basis for rational division of tax power. Tax structure is a country based on national circumstances and financial need, by the nature and role of a number of different taxes are the main components have time, co-ordinated, structured tax system. For a long time, China's tax structure in place a turnover tax class as the main model, the 1994 tax reform, this has become an increasingly strengthened, turnover tax of total tax revenue accounted for 70% of tax revenue, 1994 - 1998, 75.76%, respectively, 74.89%, 74.55%, 72.69%, 74.22%. Of course, this time with our relatively low productivity level and the level of tax collection and management of the relevant backward. Relatively low level of development of productive forces, tax collection and management level is not high in the case, the turnover tax as the main body of the tax structure conducive to the organization tax revenue will help simplify administration and reduce the cost of collection. But with the development of productive forces and the improvement of the quality of tax officials, tax levy means the continuous modernization of the conditions for restructuring the tax system has been basically mature.
from China's economic policy objectives and the development of the objective requirements and the level of tax collection and management perspective, turnover tax and income tax to both the First of all, from the foreign experience, the tax structure of a country from the turnover tax as the main model to turnover tax and income tax double main model, the economic conditions of gross domestic product per capita of about $ 700. Such as Japan, the level of conversion is $ 789, U.S. $ 815, Britain $ 717. September 2000 National Bureau of Statistics figures show that China's current per capita GDP has reached $ 849, so the conversion of tax structure models already have the conversion of economic conditions. Secondly, the quality of tax officials has been greatly improved than before, more than 80 million of existing tax force, the college education, accounting for more than 60% have bachelor degree and above more than 22% of the tax now also formed the training of personnel in Dalian, Yangzhou, Changsha, personnel conditions. Third, China's continued modernization of taxation management tools, the end of 1998, China's tax system computing device equipped with up to 157,004 units, the computer management of 28,727 people, computer processing tax of 16,783,544 households, tax collection and management of our tax structure and equipment modernization conversion provides a technological advantage.
In addition, we should levy some new taxes, such as social security tax, inheritance tax, green taxes, vehicle purchase tax, fuel tax, etc.; expanded value-added tax, the construction and transport and into the ranks of value-added tax and consumption-type VAT implementation; the corporate income tax and foreign-invested enterprises and foreign enterprises income tax consolidated unified company (corporate) income tax; urban land use tax can be incorporated into the resource tax; will be incorporated into the banquet tax consumption tax, the appropriate taxation of consumption tax adjustment range, increase the number of high-end entertainment and luxury consumer items, such as golf, sauna, senior beauty, etc., and abolition of the present consumption tax items in the production and general living items, such as alcohol, skin care hair products.
2. The correct division of the central and local Tax Legislation

Tax Legislation in the correct classification is a reasonable division of the central and local taxes, the right to first solve the problem. To ensure that the legislative power of the central tax revenue, while tax revenue of local governments to gradually expand the legislative power.
sovereign legislative power is owned by the particular exercise of state authority in the country occupy a special position in the power structure, and used to develop, validate and document changes in regulatory law to adjust certain social relations integrated power system, which includes the exercise of national legislative power of the legislature and other state organs, local authorities exercise of legislative authority. China has adopted a highly centralized political system, which determines the centralized and unified leadership of the central legislative authority is the division of the existing system of basic features. The characteristics of the decision of the Central legislation in the country's leading legislative system and basic. For the basic tax, national tax laws must be concentrated in the central, by the National People's Congress or its Standing Committee of the legislature, or by the NPC and its Standing Committee authorized the State legislation. Such as the Law
In addition, because of the region varies considerably, especially in the economic system to explore the many reform measures with the trial, if all tax laws formulated by the highest authority, it is difficult to do mobile, flexible and timely ; of democratic centralism, has always stressed to play the central and local initiative, which local authorities must give full play to the initiative in legislation. Tax Legislation in the central and local governments in the appropriate division, both the central government is conducive to maintaining the leading position of the tax regulation, the coordination of macroeconomic stability conducive to development, and it helps local governments to play a positive role of Tax Regulation so that the development of the local regional economy vibrant. For some regional and local taxes, according to actual needs and possibilities around by the local authority to exercise legislative powers determined by the local government levy or stop collecting these taxes to the exercise of legislative power by the local authority, the local to decide whether to impose the tax rate and tax base width of the level of local adjustments to play better place to expand financial resources, organizational revenue initiative.
In short, the tax legislative authority to clear and reasonable, the central and local tax legislation, to sub-tax charge, and its powers given to local, legislative and financial authority to adapt the tax to meet the needs of local economic development. At the same time setting taxes, levy, stop collecting, interpreting and other relief must be a reasonable division of authority.
3. A clear division of central and local ownership of tax revenue

by central and local tax revenue attributable to the general principle should be: Stick to the central revenue share of total revenue to be about 60%, is conducive to the central Financial income and local revenue grows, help to mobilize central and local economic development organizations active income. Since the implementation of the tax system, China's central government revenue share of total revenue in 1995-1999 has been a declining trend, or wandering, respectively, 52.2%, 49.4%, 48.8%, 49.6%, 50.96%. This pattern and in stark contrast to overseas. View from the developed countries, both unitary state or a federal state in the country's total financial allocation pattern, the central focus of the financial share is generally maintained above 60%. From the perspective of developing countries, in addition to individual countries, the central focus of the financial share is generally 70% or more. In addition, our criteria for the classification of income taxes and less science. Such as central business income tax return the central government, local business income tax to the local finance, which not only led to the tax system is not standardized, but also to establish a unified market economy defeat.
Therefore, we determine the central fiscal revenue in total revenue share should be based on China's national conditions, in both central and local governments to play a positive principle, to establish the proportion of around 60%. In the division of taxes and tax revenue, due to the tasks undertaken by the central government and the special importance of overall, local government is mainly responsible for local economic and social development are closely related matters. Therefore, we should high proportion of their income, the tax burden was placed under the central distribution of a wide range of tax, where those with close economic and social development, sources scattered collection of local taxes designated for the local tax revenue. Meanwhile, the economic development of certain major taxes directly related to the sharing of central and local governments as tax revenue. In the specific division and operation, we can divide the existing revenue-sharing basis to determine. Central fixed tax revenue include: customs duties, excise duties collected by customs and value added tax, consumption tax. Local fixed tax revenue include: business tax, personal income tax, social security tax, inheritance tax, gift tax, vehicle purchase tax, fuel tax, urban land use tax, stamp duty, deed tax and so on. Central and local share of tax revenue include: VAT, income tax, resource tax and securities transaction tax. Including VAT, income tax and securities transaction tax can take the form of homologous fraction divided by the resource tax based upon the current system.
4. Specific tax, land tax revenue collection and management of their respective rights

tax collection and management system is an important part of the tax system, which is to ensure the effective implementation of tax policy, tax revenue and thus protect the timely and full storage key . Thus, tax, land tax revenue collection and management of their respective clear division of authority or not, is directly related to the respective central and local tax revenue collection and storage quality. Since our country is divided into tax authorities, the tax, land tax registration, invoice management, tax returns, tax collection and other aspects of tax collection and management authority for a number of adjustments, but there are still intertwined in some cases unclear. To improve the management of tax collection and prevent tax, land tax collection and management issues in the conflicts and
tax registration, can be based upon the existing Gordon drain pipe household management, and constantly improve the rate of tax registration. Management of the invoice shall be vested right in the income tax attributable to divide, which is fixed and the Central share of turnover tax invoice management ownership tax department of the taxpayer, is the local fixed income and turnover tax return the taxpayer's invoice management local tax departments. In the tax return, we must adhere to the approach were reported, the Central tax to the tax return, the local tax return to the land tax, the tax must share the tax, land tax declaration. In terms of tax collection, tax, land tax collection should be strictly define the boundary. Fixed-fixed central tax revenue collected by the Internal Revenue Service, the local fixed income fixed by the local tax bureau levied on the sharing of tax levied can be unified by the tax were put in storage, where the conditions are ripe provinces, such as local cities and provinces where the Inland Revenue Department that the Inland Revenue Department that the overall quality of the collection means and the collection level has reached the level of shared taxes levied, by the local government to apply to the State Administration of Taxation, were divided by the rate of Tax and Land Tax levied. As the condition continues to mature, the overall quality of the national tax officials continuously improve collection and management means of continuous modernization of tax administration in the sharing, we should implement tax, land tax levy of Tax points, and gradually abolish local taxes collected by the tax measures All local taxes and the sharing of tax sharing some of the local land tax system should be entirely self-imposed management.