The Third Plenary Session of the 20th Central Committee of the Communist Party of China has made comprehensive arrangements and put forward clear requirements for deepening the reform of the financial and tax system. The Decision of the Central Committee of the Communist Party of China on Further Comprehensively Deepening Reform and Promoting Chinese path to modernization (hereinafter referred to as the "Decision") mentioned that it is necessary to establish a central and local financial relationship with clear powers and responsibilities, financial coordination and regional balance. The continuous improvement of China's fiscal and taxation system has gradually formed the current local tax system, which has played a positive role in safeguarding the financial resources of local governments and promoting sustainable and healthy economic and social development. As China's economy shifts towards a stage of high-quality development, problems such as an imperfect local tax system, unreasonable structure, and inadequate allocation of tax power are gradually becoming prominent Recently, Vice Minister of Finance Wang Dongwei stated at a press conference of the State Council Information Office that the Ministry of Finance will fully implement the deployment tasks of the Third Plenum Decision, deepen the demonstration of specific reform plans, mature one, and launch one. What specific arrangements does the Ministry of Finance have for promoting the reform of the fiscal and taxation system in the next step? At the press conference, Wang Dongwei introduced three measures: firstly, expanding local tax sources. Among the current large-scale tax categories, consumption tax belongs entirely to the central government and is mainly levied in the production and import links. Next, we will consider moving the consumption tax collection process backwards and steadily downgrading it to local governments. We will take into account factors such as the division of central and local revenue, tax collection and management capabilities, and implement it steadily by item and step, expanding local revenue sources and guiding local governments to improve the consumption environment. Research on merging 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. Reform the environmental protection tax to include volatile organic compounds in the scope of collection. Secondly, appropriately expand the power of local taxation. In recent years, in local tax legislation such as the Environmental Protection Tax Law, Resource Tax Law, and Farmland Occupation Tax Law, provincial-level localities have been granted management authority to determine specific applicable tax rates, tax reductions, and exemptions. In the future, based on the unified legislation and tax collection power of the central government, we will explore and study the determination of local tax system elements and give greater autonomy to localities in specific implementation. Thirdly, standardize the management of non tax revenue. Non tax revenue mainly belongs to local governments and is an important component of local financial resources. Consider standardizing non tax revenue management, appropriately delegating some non tax revenue management authority, and implementing differentiated management based on local conditions. Deepen the reform of the paid use system for natural resources. Include all income obtained through administrative power, government credit, and state-owned resource assets in government budget management. For the issue of toll roads, we will promote the optimization of relevant policies based on the principle of "beneficiary pays". The ideas and measures for fiscal and tax reform discussed at the Third Plenum have strong practical relevance, and are aimed at addressing and improving problems Luo Zhiheng, Chief Economist and Research Institute Dean of Yuekai Securities, stated in an interview with People's Daily that it is necessary to enhance local disposable financial resources and expand local tax sources. Luo Zhiheng said that relevant measures will focus on reducing the authority and expenditure responsibility of local governments, stabilizing macro tax burden and revitalizing stock assets, which will help solve the current short-term fiscal tight balance and debt risk problems, and at the same time, help to better play the role of finance in financial security and institutional support in serving Chinese path to modernization. (New Society)