Core Viewpoint - The article emphasizes the need for fiscal and tax system reforms to enhance local government financial autonomy, improve governance capabilities, optimize public services, and promote economic development in China. Group 1: Issues in Local Fiscal System - Local governments lack stable financial sources, with a high proportion of central and shared taxes, while pure local taxes account for less than 20% of total tax revenue [2] - The rapid development of emerging economies has not translated into increased local tax contributions due to mismatches in the current tax system and management framework [3] - There is an imbalance between fiscal rights and responsibilities at the grassroots level, leading to a mismatch between income and expenditure [3][4] Group 2: Recommendations for Reform - Improve the tax system to align with new business models, particularly in the digital economy, to expand local tax sources and enhance fiscal capacity [5] - Accelerate reforms in local taxes, including adjustments to the urban maintenance and construction tax to better reflect regional fiscal needs [6][7] - Rationally allocate fiscal rights and responsibilities between central and local governments, ensuring that local fiscal powers match their responsibilities [8]