The new round of fiscal and taxation system reform has been set. The Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese path to modernization has made a deployment for "deepening the reform of the fiscal and taxation system", clarifying the direction and path. In response to the financial difficulties faced by local governments and grassroots, improving the relationship between central and local finances is a key focus of reform, and increasing local financial resources has become a major direction. Increase local independent financial resources, expand local tax sources, and appropriately expand local tax management authority The Decision proposes to move the consumption tax collection process backwards and steadily lower it to the local level, improve the value-added tax retention and refund policy and deduction chain, and optimize the sharing ratio of shared tax. Among them, the reform of consumption tax has attracted much attention. At present, the consumption tax is levied on 15 tax items including cigarettes, alcohol, cars, and refined oil products. According to data from the Ministry of Finance, the domestic consumption tax in 2023 will be 1611.8 billion yuan, making it the third largest tax category. At present, consumption tax belongs to the central tax category, and the income belongs to the central finance, mainly levied in the production process. According to the direction determined by the Decision, the important tax category of consumption tax will be 'moved backwards' and' downgraded '. Sanlihe noted that the Promotion Plan for Adjusting the Central and Local Income Division Reform after Implementing a Larger Scale of Tax and Fee Reduction issued by the State Council in 2019 had proposed that the consumption tax collection link should be moved later and steadily transferred to local areas. According to the requirements of improving the local tax system reform, under the premise of controllable management, some current consumption tax items collected in the production (import) link will gradually be moved to the wholesale or retail link for collection, expanding local sources of income and guiding local governments to improve the consumption environment. How to understand the "backward shift" and "downward shift" of consumption tax? Zhang Lianqi, a member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference, President of the China Enterprise Financial Management Association, and Vice President of the China Taxation Society, analyzed Sanlihe. The so-called "downgrading" of consumption tax refers to the transfer of a portion of the consumption tax revenue, which used to belong entirely to the central government, to local governments. The so-called "backward shifting" refers to the production and processing companies in the past paying consumption tax on behalf of their local tax authorities, and then transferring it to wholesalers or retailers to pay on behalf of their local tax authorities. The reform of consumption tax has symbolic significance for increasing local independent financial resources and expanding local tax sources Zhang Lianqi said. Shi Zhengwen, Director of the Finance and Taxation Law Research Center at China University of Political Science and Law, told Sanlihe that the consumption tax reform will increase local independent financial resources, alleviate current financial difficulties, and adjust and optimize the relationship between central and local finances. It has positive significance, is conducive to the transformation of local development modes, and helps to play the role of consumption in driving the economy. The specific tax items that need to be moved later need to consider the controllability of tax collection and the role of consumption tax regulation. In addition to increasing local financial resources, there have also been new adjustments in terms of financial and administrative powers. The Decision proposes to study the merger of urban maintenance and construction tax, education surcharge, and local education surcharge into local surtax, authorizing local governments to determine specific applicable tax rates within a certain range. Standardize non tax revenue management, appropriately delegate some non tax revenue management authority, and implement differentiated management based on local conditions. In addition, it is necessary to strengthen the central government's powers appropriately and increase the proportion of central fiscal expenditures. The principle of central financial powers is to allocate expenditures through the central government at the local level, reducing the delegation of central financial powers to local authorities. Shi Zhengwen believes that optimizing the relationship between central and local finances through the adjustment of financial resources, financial power, and administrative authority is scientifically feasible and targeted, which can help solve some deep-seated long-term problems in the financial and tax system, promote the effective performance of local governments, and better guarantee the improvement of people's livelihoods and economic development. The deepening of the reform of the fiscal and taxation system will further improve the macroeconomic governance system and inject momentum into high-quality development. (New Society)