Core Viewpoint - The article discusses the framework and requirements for a new round of fiscal and tax system reform in China, emphasizing the need to address current fiscal challenges and improve the fiscal structure to support a high-level socialist market economy [2][3]. Group 1: Increasing Fiscal Revenue - The proportion of fiscal revenue to GDP has decreased from 28%-29% in 2018 to 26% in 2023, with tax revenue at only 14.4% of GDP [4][6]. - The government fund budget revenue for 2023 is projected at 7 trillion yuan, primarily from land transfer income, which has seen a significant decline in net income due to rising costs and a sluggish real estate market [5][6]. - The current fiscal revenue ratio is lower than that of comparable countries, necessitating an increase in fiscal revenue to meet future public service demands, especially with an aging population [6][7]. Group 2: Enhancing Local Tax Systems - Local fiscal revenue heavily relies on shared taxes, with limited independent tax sources, necessitating reforms to increase local financial autonomy and expand tax sources [12][13]. - The article suggests that the reform should focus on optimizing the sharing ratio of shared taxes and enhancing local tax management authority [13][14]. Group 3: Central-Local Fiscal Relations - The current fiscal relationship between central and local governments is imbalanced, with local governments relying heavily on transfers from the central government, which is unsustainable [18][19]. - The article highlights the need for a clearer delineation of responsibilities between central and local governments to improve fiscal efficiency and governance [20][21]. Group 4: Policy Framework and Implementation - The article advocates for a comprehensive fiscal policy framework that includes increasing the fiscal deficit rate to support local governments and enhance public service provision [25][26]. - It emphasizes the importance of addressing the dual structure of urban and rural economies to promote balanced development and improve overall fiscal health [28][29]. Group 5: VAT System Improvement - The current VAT system needs reform to adapt to new economic realities, including the need for timely tax refunds to support businesses and stimulate economic activity [29][30]. - The article suggests adjusting the VAT collection mechanism to ensure it aligns with modern economic practices and supports innovation in various industries [31][32].