since much starker choices-and graver consequences-in ", "financial department insist on xi new era the ideas of socialism with chinese characteristics as a guide, adhere to seek improvement in stability work always tone, carry out new development concept, to carry out the high quality requirements, in order to supply side structural reform as the main line, to implement a proactive fiscal policy more efficiently, improve the policy of prospective effectiveness, flexibility, and in expanding domestic demand and played a greater role on structure adjustment, focus on support play three big battle, to protect and improve the livelihood of the people, strongly promote the economic and social sustainable and healthy development.
we will continue to increase tax and fee reductions to effectively ease the burden on the real economy
the real economy is the foundation of a country's economy, the fundamental source of wealth creation, and an important pillar of a country's prosperity. in order to support the development of the real economy, the financial sector has insisted on reducing government revenue in exchange for adding business efficiency and multiplying market vitality.
over the past five years, in conjunction with the tax reform, the financial sector has implemented a series of tax reduction policies, focusing on reducing the tax burden on manufacturing and small and micro businesses. we will fully implement the policy of replacing business tax with value-added tax, deepen vat reform, streamline tax rates, reduce vat rates, and implement the policy of retention, credit, and rebate. the value-added tax and enterprise income tax policies that support small and micro businesses have been expanded, and the preferential tax policies that support r&d and innovation have been improved. we will raise the basic individual income tax deduction standard and implement special additional deductions to reduce the tax burden on the working class. we will lower the overall tariff level and support greater opening-up. we will increase efforts to reduce fees across the board, and continue to review and standardize fees charged by enterprises. by significantly reducing the proportion of contributions to the basic old-age insurance for employees, and periodically lowering the rates of unemployment insurance and work-related injury insurance, enterprises will be able to reduce the burden of social security contributions.
statistics show that about 570 billion yuan, 1 trillion yuan, 1.3 trillion yuan and 2.36 trillion yuan will be increased in taxes and fees from 2016 to 2019, and another 2.5 trillion yuan will be cut this year.
we will support deepening supply-side structural reform to promote high-quality economic development
deepening supply-side structural reform is a good way to address the root causes of economic restructuring and transformation of the economic development pattern. it is the only way to achieve high-quality development. since the 13th five-year plan period (2016-2020), proactive fiscal policy has remained the main line of supply-side structural reform. we have adopted more reform measures and made greater use of market-based and law-based means to "consolidate, strengthen, upgrade and smooth" our efforts to enhance the quality of china's economy. we will consolidate the results of the "three cuts, one reduction, and one subsidy" plan, dispose of zombie enterprises, and clear out industries with excess production capacity. we will implement preferential tax policies for enterprise restructuring and restructuring, and cut overcapacity and make structural adjustments, and encourage enterprises to let go of the bad. we will strengthen the vitality of micro subjects, implement the strategy of innovation-driven development, continue to increase investment in basic research, strengthen support for public scientific and technological activities, arouse the enthusiasm of researchers, and solve the problem of insufficient capacity for original innovation.
we will improve the industrial chain, promote high-quality development of the manufacturing sector, give full play to the role of government funds, and guide capital and resources to focus on key strategic areas. we will unblock the circulation of the national economy, and encourage financial institutions to increase support for private enterprises and small and medium-sized enterprises through the comprehensive use of tax incentives. we will make good use of special funds for the development of inclusive finance to support small and micro businesses and major entities in agriculture, rural areas and farmers in finding financing difficult and expensive.
we will maintain the necessary scale of fiscal expenditure to support expansion of domestic demand
as a result of the slowdown in economic growth and the reduction of taxes and fees, the growth of fiscal revenue has slowed down since the 13th five-year plan period. in this context, by increasing the fiscal deficit to a certain extent, china has maintained the necessary intensity of expenditure to better play the role of counter-cyclical adjustment. from 2016 to 2019, the national fiscal deficit will increase from 2.18 trillion yuan to 2.76 trillion yuan, and this year it will rise to 3.76 trillion yuan to meet the needs of the epidemic. by coordinating government revenue, deficit and using the budget stabilization fund, government expenditure increased from 14 trillion yuan in 2013 to 23.9 trillion yuan in 2019, with an average annual growth rate of 9.6% and 2.4 percentage points higher than the average annual growth rate of government revenue in the same period. this year, 24.8 trillion yuan is budgeted for government spending, which remains at a relatively high level.
in order to make the most of the limited funds available, the financial sector has adopted a bottom-line mentality, adhered to the principle of keeping some sectors in line with others, constantly improved the structure of expenditure, focused on making itself more supportive of the overall economic and social development of the country, and worked to promote consumption, stabilize investment, and unleash the potential of domestic demand. we will continue to increase the scale of central infrastructure investment, optimize the direction and structure of investment, and focus support on low-income housing projects and major infrastructure projects. in line with the new trend of accelerating service consumption, we will support the expansion of the supply of education, culture, sports, elderly care, medical care and other services, support the development of the new-energy automobile industry, support the expansion of rural consumption, and foster new areas of growth in consumption. at the same time, to support steady local investment and strengthen weak links, special bonds will be issued by local governments. from 2016 to 2020, the new debt limit will be increased from 100 billion yuan to 3.75 trillion yuan, giving full play to the leverage role in boosting investment.
we will strengthen policy support and financial support to resolutely win the three major battle s
the three major battles, namely, preventing and defusing major risks, eradicating poverty, and preventing and controlling pollution, bear on china's overall development. they are not only necessary to solve difficult problems in development and promote high-quality economic development, but also necessary to achieve the goal of building a moderately prosperous society in all respects. in accordance with the decisions and plans of the cpc central committee and the state council, financial departments have made targeted and targeted breakthroughs to address major issues and concentrated their efforts on key campaigns. we will continue to dredge and strengthen local government debt management. we will resolutely curb the increase of hidden debts and actively yet prudently defuse the stock of hidden debts. by the end of 2019, the outstanding debt of local governments was 21.31 trillion yuan, and the debt ratio (outstanding debt/comprehensive financial resources) of local governments was 82.9 percent, lower than the internationally accepted warning line of 100 percent to 120 percent. the risks were generally under control.
we will adhere to the current poverty line, improve funding and policy systems, and do our best to support and win the battle against poverty. we will continue to increase the size of special government funds for poverty alleviation, mainly to support poor areas in speeding up their economic and social development, improving the basic working and living conditions of the poverty-stricken people, enhancing their capacity for self-development, and raising their income levels. we will also increase investment in agriculture, education, and medical care. focus on winning the sky battle and so on seven big signature campaign, the central government for pollution prevention and control of the key work of investment, increasing overall consideration and enlarge, focus on the beijing-tianjin-hebei prominent environmental problem in key areas, such as the implementation of the northern cities clean heating pilot, support the yangtze river economic belt protection and restoration of ecological, contaminated soil remediation and management, such as priority, to promote the ecological environment of continuous quality improvement.
we will continue to do our best to ensure and improve people's wellbeing
public finance is made for and used by the people. the financial departments have always adhered to the people-centered development philosophy, highlighted the publicity and fairness of public finance, and made sure that the fruits of reform and development will benefit the people in a more equitable manner. since the beginning of the 13th five-year plan period, despite considerable pressure on the government to balance revenues and expenditures, we have ensured that investment in basic livelihood has only increased and not decreased. at the same time, we have done our best to ensure that the basic necessities are kept within our means, promoted the design of spending policies and mechanisms in related areas, and raised the level of ensuring and improving people's livelihood. we will support the implementation of the policy of giving priority to employment, do a good job in finding jobs for college graduates, ex-servicemen, rural migrant workers and other key groups, and provide more assistance to urban residents who have difficulty finding jobs. address the masses concerned with education, health care, social security problems, support the development of more fair and more quality education, continue to improve the level of urban and rural residents basic medical insurance and serious illness insurance, pushing forward the construction of the multi-level old-age security system to improve retiree basic pension, the appropriate standard of improving the urban and rural subsistence allowances, special assistance. from 2016 to 2019, key expenditures related to people's livelihood, including education, social security and employment, urban and rural communities, medical and health care and family planning, housing security, energy conservation and environmental protection, culture, sports and media, have increased from 9.6 trillion yuan to 12.4 trillion yuan, accounting for 51.1% of total expenditures to 52.1% of total expenditures.
this year is to build a well-off society in an all-round way in the final years of the treasury in accordance with the party central committee and the state council decision deployment, adhere to the new concept of development, adhere to the supply side structural reform as the main line, epidemic prevention and control and as a whole and better economic and social development work, constant innovation and improvement of financial macro-control, continue to implement a more promising positive fiscal policy, solid do a good job in "six stability" full implementation of "six protect" task, to build a well-off society in an all-round way and realize the first one hundred goals make new contributions.
source: ministry of finance, prc