Take the lead in stabilizing the market fiscal policy, fully expand demand and protect people’s livelihood
Since the beginning of this year, the new combined tax and fee support policy has been implemented in detail, benefiting market players; Policies such as special bonds are put forward to give full play to the role of stable investment; Improve the efficiency of the use of funds, and ensure the people’s livelihood and other expenditures … Actively and accurately exert fiscal policies to play an important role in stabilizing the economy and protecting people’s livelihood.
According to the new arrangements such as the National Standing Committee, in the next step, fiscal policy should increase support for the real economy, and the income-side tax and fee support should be increased to promote the consumption of new energy vehicles and ease the difficulties of the old-age care service industry; The expenditure side will revitalize the special debt limit space according to law and strengthen the people’s livelihood.
—— Increase the support for entity taxes and fees, and then increase the price.
Since the beginning of this year, China has implemented a new combined tax and fee support policy, which has played an important role in boosting the confidence of market participants, expanding consumer investment, enhancing the endogenous power of development and stabilizing the macro-economic market.
According to the data of State Taxation Administration of The People’s Republic of China, as of July 20th, the newly-added tax reduction and fee reduction and tax refund deferred fee exceeded 3 trillion yuan. A total of 2,000.5 billion yuan of value-added tax has been refunded to taxpayers’ accounts, which is more than three times that of last year.
The Standing Committee of the National People’s Congress held on August 19 made it clear that the tax and fee support measures should be expanded and overweight: the value-added tax allowance for the aged care service industry should be refunded in one lump sum and in monthly increments; All localities will reduce the local "six taxes and two fees" this year. The new energy vehicle purchase tax policy will be exempted, and the implementation will be postponed until the end of next year. It is estimated that the new tax exemption will be 100 billion yuan. Travel tax and consumption tax will continue to be exempted.
Li Xuhong, a professor at Beijing National Accounting Institute, told the Economic Information Daily that in the first half of the year, due to the COVID-19 epidemic and changes in the domestic and international economic situation, although China’s economy continued to recover, it still fluctuated slightly. Strengthening fiscal policy to support the real economy is conducive to reducing the production and operation costs of the real economy and has played a buffering role in helping the real economy cope with external environmental shocks. It also sends a positive signal to market participants, which will enhance their expectations of the economy, promote the expansion of effective demand and guide the formation of effective supply.
-Revitalize the special debt limit space according to law.
Since the beginning of this year, special bonds have been put forward to give full play to the role of expanding effective investment.
The distribution and use speed is fast. According to the latest data from the Ministry of Finance, from January to July this year, 3.47 trillion yuan of new special bonds have been issued by local governments nationwide, and the amount of special bonds used for project construction has basically been issued. Mainly used in municipal construction and industrial park infrastructure, social undertakings, transportation infrastructure, affordable housing projects, agriculture, forestry and water conservancy and other key areas identified by the CPC Central Committee and the State Council.
The effect of stimulating investment is obvious. From January to July this year, various localities have arranged more than 250 billion yuan of special bond funds to be used as capital for major projects such as railways, toll roads and trunk airports, which has actively played the role of inciting government investment to "four or two thousand pounds". According to the latest data from the National Bureau of Statistics, from January to July, infrastructure investment increased by 7.4% year-on-year, which was 1.7 percentage points higher than the national fixed asset investment growth rate and accelerated for three consecutive months.
Efforts were made to expand demand and stabilize the economy. On August 19th, the National People’s Congress made new arrangements to revitalize the local special debt limit space according to law.
In the view of Tang Linmin, a senior researcher at China International Futures Co., Ltd., "activating the local special debt limit space according to law" is an important force for fiscal policy to continue to achieve stable economic efficiency. He told the reporter of the Economic Information Daily that according to preliminary calculations, as of the end of July, there was a limit of nearly 1.5 trillion yuan for the remaining local government special debt. The policy effect of revitalizing the special debt limit space mainly depends on how the policy is deployed and implemented. It is suggested to deploy and implement as soon as possible, determine the optimal total scale of special debt and the provincial quota, and further optimize the direction and efficiency of the use of special debt funds to maximize the policy effect.
Luo Zhiheng, president of Guangdong Securities Research Institute, said that fiscal policy will play an important role in stabilizing consumption and boosting investment. In his view, making good use of the stock limit of special bonds can appropriately alleviate the financial pressure in some areas and promote the ability of infrastructure. However, considering the uneven geographical distribution of the difference between the limit and balance of special bonds at the end of 2021 and the different demand for special bonds in different places, it is still necessary to work hard on project reserve and screening to fully play its role.
The relevant person in charge of the Ministry of Finance said that the next step will be to resolutely implement the spirit of Politburo meeting of the Chinese Communist Party, guide local governments to make good use of special government bond funds, make full use of the relatively small window period of local government bond issuance recently, and complete the finishing work of issuing new special bonds in 2022. Accelerate the use of special bond funds, and urge local governments to speed up the management of special bond projects in accordance with the requirements of "zero tolerance" to effectively prevent the risks of special bonds. At the same time, study and guide local governments to make full use of special debt limits, revitalize the debt limit space according to law, and play an effective investment role.
-Strengthening people’s livelihood.
Since the beginning of this year, the national general public budget expenditure has maintained growth, and expenditures in key areas such as people’s livelihood have been effectively guaranteed. According to the data of the Ministry of Finance, from January to July, the social security and employment expenditure totaled 2,275.7 billion yuan, an increase of 5.5%; Education expenditure was 2,183.7 billion yuan, an increase of 4.7%; Health expenditure was 1,266.8 billion yuan, an increase of 8.6%; Expenditure on agriculture, forestry and water was 1,198.5 billion yuan, an increase of 8.7%; Transportation expenditure was 700 billion yuan, an increase of 13.1%; Expenditure on science and technology was 497.3 billion yuan, up by 20.5%.
The next step, including strengthening the basic living security of people in difficulty, fully implementing the minimum living allowance and expanding the scope, will also be launched.
Li Xuhong said that the implementation of a proactive fiscal policy is a key force to help economic recovery and a necessary means for the government’s macro-control. In the next step, we should continue to play the positive role of fiscal policy and stabilize the economic operation in a reasonable range. In addition to giving full play to the effect of the tax refund policy to help enterprises bail out, and giving full play to the financial tool effect of promoting social capital investment such as special debt, we should also improve the efficiency of the use of financial funds, ensure expenditures in key areas such as people’s livelihood, and at the same time implement preferential tax policies that are conducive to protecting people’s livelihood and promoting consumption, enhance residents’ sense of gain, and firmly grasp the bottom line of people’s livelihood from both revenue and expenditure.
Reporter Sun Shaohua