Deputy Director Yu Hong of Our Institute Accepted Interview by “China Financial and Economic News”

  “In last year, facing the economic downturn pressure and impact of pandemic, the proactive fiscal policy played important role in the aspects of macroeconomic regulation and improvement of people’s livelihood.” Deputy Director Yu Hong of our institute accepted interview by reporter of the “China Financial and Economic News” and said that “The fiscal policy in this year will be more vigorous and flexible, believed to be able to further stabilize and boost market confidence, firmly hold the bottom line, and continuously improve people’s livelihood.

Yu Hong indicated that from the execution of fiscal policy in 2021, the effect of the policy to cut taxes and administrative fees was remarkable. In addition to the accumulated reduction of taxes and administrative fees of over RMB 7.6 trillion during the “Thirteenth Five Year Plan” period, another RMB 1 trillion of taxes and administrative fees was further reduced, which effectively stimulated vitality of market entities, provided very good assistance to the economic and social development. Such a supportive role was even more obvious for small and micro-sized enterprises and enterprises of new business types.

“Last year, China’s economic growth rate and fiscal revenue realized ‘Double Increase’, under the background of scaled-up reduction of taxes and administrative fees, such a growth was hard-won, and also indirectly reflected that the actual effect of reduction of taxes and administrative fees indeed reached expectations.” Yu Hong said.

For the fiscal work arrangement in this year, the budget report clearly stated that the proactive fiscal policy shall enhance the efficiency and focus more on precision and sustainability. The deficit rate in this year was planned to be arranged at around 2.8%, which decreased by 0.4% compared with that in the budget in last year, and the funding scale will decrease by RMB 200 billion. “Although the fiscal deficit rate to be arranged in this year decreased to within 3%, the available central fiscal funds increased by relatively large margin through cross-annual adjustment, which is able to guarantee the intensity of fiscal expenditure and the demand for transfer payment.” Yu Hong said.

In 2022, the new combined-type tax support policy is estimated to generate about RMB 2.5 trillion of tax rebate and tax reduction throughout this year. Yu Hong believed that it reflected that the fiscal policy is continuously innovating and having more vitality and flexibility. By making new changes in policy structure at proper times, it can better adapt to the new normal of economic development, and bring new development dynamics to the market, enterprises and individuals.” As one of the most proactive, most direct and most effective policy tools among proactive fiscal policies, how to enable policies to be implemented more precisely and have more outstanding effect through proper adjustment of internal structure is something that the competent authorities need to constantly explore for.” She said.

The degree of offsetting and rebates of enterprise VAT was significantly enlarged in this year at about RMB 1.5 trillion.” It’s believed that after the implementation of these policies, it will directly increase the cash flow of enterprises, alleviate the financing difficulties of enterprises, and encourage them to enlarge the inputs in production and R&D.” She reminded that to judge the effect of tax support policy, we can’t focus only on the scale of reduction of taxes and administrative fees, it should be measured by the reactions and expectations of the final beneficiary entities.