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Transfer Payments to Local Governments to be Increased

The Chinese government will increase transfer payments to local governments in 2004, especially those in the central and western regions, for balanced development, Finance Minister Jin Renqing said Saturday.


In addition to 427.7 billion yuan in tax rebates and structural subsidies, the central government plans to grant local governments513.3 billion yuan in transfer payments, an increase of 64.4 billion yuan over last year in comparable terms, he told lawmakers gathering here at an annual session.


Of this amount, 223.8 billion yuan will come in the form of general transfer payments, a rise of 32.6 billion yuan from last year.


A special task force will be organized to thoroughly investigate and study the causes of financial difficulties at the lower levels of government, and propose specific measures to eliminate them as soon as possible on a "type-by-type" and "step-by-step" basis.


According to Jin, the target for export tax rebates set in the 2004 central budget is 210.8 billion yuan, and revenue from the increase in the value added tax and the consumption tax on imported goods will be used first to pay export tax rebates.


"Local governments also need to set adequate targets for export tax rebates," he said.


The minister also pledged to accelerate the formulation of policies and plans to make the corporate income tax the same for both Chinese and foreign enterprises and to reform other tax systems this year.


In order to strengthen government authority and ensure that government employees are paid on time and in full, an extra 11.8 billion yuan will be allocated from this year's central budget to cover pay raises for employees of government organs and institutions.


An extra 3 billion yuan will be allocated to increase benefits for retired army officers who are taken care of by governments at all levels and to cover the additional expenses resulting from policy changes involving those entitled to special government care and preferential treatment.


(Xinhua News Agency March 6, 2004)


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