In 2021, China will increase tax cuts and fees by about 1.1 trillion yuan. The central economic work conference made it clear that China will implement a new tax reduction and fee reduction policy in 2022. Market players pay close attention to the policy driving point and relevant key work. The significance of reducing taxes and fees is self-evident. Reducing taxes and fees will improve the investment enthusiasm and profitability of enterprises, which is conducive to guiding more market subjects to invest, releasing the resources occupied by government driven investment, optimizing the investment structure, improving the overall investment efficiency and reducing the downward pressure on the economy. A large-scale tax reduction and fee reduction is bound to reduce fiscal revenue, but the rigidity of fiscal expenditure remains unchanged, and the problem of fiscal revenue and expenditure balance is prominent. The scale of available financial resources can be effectively increased by using special turned in income, that is, the profits that should be turned over from the stock of specific state-owned financial institutions and franchised institutions. The central bank is also one of the units to be turned over. It is of great significance to increase fiscal revenue by turning over profits to the central finance through the central bank. From the perspective of the implementation of laws and regulations, the profit turned over by the central bank is a legal matter and a common practice in China. The net profit of the central bank has always been an important part of China's fiscal revenue. The law of the people's Bank of China (amended in 2003) stipulates that "the net profit of the people's Bank of China after deducting the expenditure of that year from the income of each fiscal year and withdrawing the total reserve according to the proportion approved by the financial department of the State Council shall be turned over to the central finance". From the perspective of international practice, it is the common practice of major economies in the world for the central bank to turn in profits. The Federal Reserve Law of the United States, the Bank of Japan law and the banking law of the United Kingdom all have clear provisions on the profit surrender of their respective central banks. Take the Federal Reserve as an example. In 2020, the Federal Reserve handed over $86.9 billion in profits to the US Treasury Department. For another example, the Bank of Japan must hand over the surplus after withdrawing reserves and shareholders' dividends to the Ministry of finance. In essence, the profit handed over by the central bank is essentially the seigniorage income obtained from the monopoly of currency issuance right. Seigniorage is not a real tax, but the income obtained by the sovereign government by using the monopoly currency issuance position. The bank for International Settlements (BIS) defines Seigniorage in the period of credit currency as "the profit obtained by the central bank from monopolizing currency issuance". Looking at the history of world economic development, seigniorage is an important source of national fiscal revenue in both the metal currency period and the credit currency period. (Xinhua News Agency)
Edit：He Chuanning Responsible editor：Su Suiyue
Source：Economic Information Daily
Special statement: if the pictures and texts reproduced or quoted on this site infringe your legitimate rights and interests, please contact this site, and this site will correct and delete them in time. For copyright issues and website cooperation, please contact through outlook new era email：lwxsd@liaowanghn.com
Economy
Recommended Reading Change it 
Home
