Core Viewpoint - The article emphasizes the importance of a scientific fiscal and tax system as a guarantee for optimizing resource allocation, maintaining market unity, promoting social equity, and achieving long-term national stability [1] Group 1: Budget System Reform - The zero-based budgeting reform is a significant aspect of budget system reform, aiming to break the rigid pattern of "base + growth" and optimize fiscal expenditure structure [2] - The government has allocated 300 billion yuan in special bonds to support consumption upgrades, an increase of 150 billion yuan from the previous year, and 200 billion yuan for equipment updates, an increase of 50 billion yuan [2] - The budget reflects national strategies and policies, serving as a crucial support for modernizing the governance system and capabilities [3] Group 2: Tax System Reform - The personal income tax reform has shown positive progress, with 119 million taxpayers benefiting from special deductions, resulting in a 156.5% increase in tax reduction amounts from 116 billion yuan in 2020 to nearly 300 billion yuan this year [4][5] - The green tax system has been continuously improved during the "14th Five-Year Plan" period, generating 2.5 trillion yuan in revenue from environmental protection and resource taxes from 2021 to June this year [5][6] - The tax legal system has been enhanced, with 14 out of 18 existing tax types now having dedicated laws, improving the overall tax collection efficiency [6] Group 3: Central-Local Fiscal Relations - The reform plan for the division of fiscal responsibilities and expenditure responsibilities in the field of intellectual property will be implemented on January 1, 2024, covering seven aspects of management and service [7] - The reform of central-local fiscal relations is crucial for modern governance, with ongoing efforts to clarify responsibilities and improve transfer payment systems to promote regional coordination and equalization of public services [8]

Core Viewpoint - The article emphasizes the importance of a scientific fiscal and tax system as a guarantee for optimizing resource allocation, maintaining market unity, promoting social equity, and achieving long-term national stability [1] Group 1: Budget System Reform - The zero-based budgeting reform is a significant aspect of the budget system reform, aiming to break the rigid pattern of "base + growth" and optimize fiscal expenditure structure [2] - The government has allocated 300 billion yuan in special bonds to support consumption upgrades, an increase of 150 billion yuan from the previous year, and 200 billion yuan for equipment updates, an increase of 50 billion yuan [2] - The budget reflects national strategies and policies, serving as a crucial support for modernizing the governance system and capabilities [3] Group 2: Tax System Reform - The personal income tax reform has shown positive progress, with 119 million taxpayers benefiting from special deductions, resulting in a 156.5% increase in tax reduction amounts from 116 billion yuan in 2020 to nearly 300 billion yuan this year [4][5] - The green tax system has been continuously improved during the "14th Five-Year Plan" period, generating 2.5 trillion yuan in revenue from environmental protection and resource taxes from 2021 to June this year [5][6] - The tax legal system has been enhanced, with 14 out of 18 current tax types having established legal frameworks, facilitating better tax management and compliance [6] Group 3: Central-Local Fiscal Relations - The reform of the division of fiscal responsibilities and expenditure responsibilities between central and local governments in the field of intellectual property will be implemented starting January 1, 2024 [7] - The ongoing reform of central-local fiscal relations aims to enhance the equalization of basic public services and improve the central government's regulatory capacity [8] - The transfer payment system reform is deepening, establishing mechanisms to promote high-quality development and strengthen budget performance constraints [8]

Report Industry Investment Rating No relevant content provided. Core View of the Report The bond market has not formed a trend - based market, and it is expected to return to a volatile state after short - term emotional fluctuations. To obtain excess returns in the volatile market, one can first seek assets with relative volatility and liquidity on the curve, and then look for individual bonds with relative value. Currently, 30 - year Treasury bonds are recommended [25]. Summary by Relevant Catalogs This Week's Bond Market Review - This week, the bond market fluctuated sharply. The first half of the week saw a cycle of repair - decline - repair around the performance of the commodity and equity markets and the "anti - involution" policy expectations. The second half was initially stabilizing but was hit by a sharp volatility at the end of Friday due to tax policy changes. However, the 10 - year Treasury yield remained in a narrow range of 1.70% - 1.75% [1][9]. - From 25th July to 1st August, the yields of 1 - year, 5 - year, 10 - year, and 30 - year Treasury bonds decreased by 1.0BP, 3.6BP, 2.7BP, and 2.3BP respectively [11]. Next Week's Key Bond Market Concerns - A sudden change in the tax system for Treasury bonds occurred on Friday night. Next week, the bond market will first price this event. "New bonds" refer to those issued on or after 8th August with new codes, while "old bonds" are those existing before this date, including active and non - active ones [18]. - Next week, the focus is on the allocation desks' scramble for active old bonds. Old bonds may be more popular among allocation desks due to tax advantages. Non - active bonds are already concentrated in allocation desks with limited liquidity, so it is expected that allocation desks will target active old bonds. Trading desks may sell at this time and wait to trade new bonds later. Also, trading desks may increase purchases of short - term credit bonds and certificates of deposit in the short term [2][19]. - Bond yields are expected to quickly price the scramble behavior next week. The spread between new and old bonds is expected to be smaller than the static calculation result. Old bonds will have a liquidity discount after being held by allocation desks, and some institutions are insensitive to tax rates [2][20]. Next - Stage Strategy Considerations - The bond market is in a volatile state and has not shown a trend reversal. To gain excess returns, one can first find assets with relative volatility and liquidity on the curve and then look for individual bonds with relative value. Currently, 30 - year Treasury bonds are recommended [25]. - The ultra - long end of the curve has volatility and opportunities. In the second quarter, ultra - long bonds created relative volatility in a "sideways" market. They are more sensitive to short - term factors. Since the second quarter, the intraday amplitude of the 30 - year Treasury active bond was higher than that of the 10 - year Treasury active bond on 60 out of 84 trading days [25]. - After the bond market adjustment in mid - to - late July, the spread of ultra - long - end interest - rate bonds has widened. As of 1st August, the 30 - year - 10 - year Treasury spread was 24BP, at the 90% percentile in the past year [34]. - In August, there will be issuance disturbances for ultra - long bonds. After the issuance of the 50 - year special Treasury bond on 1st August, 3 more ultra - long special Treasury bonds are to be issued. With the expected reduction of the预定 interest rate in September and the possible scramble for old bonds by insurance companies after the tax reform, the allocation demand for ultra - long bonds is expected to be strong [4][36]. - During the issuance of ultra - long bonds, the relative value of individual bonds will change. If the issuance scale of "25 Special Treasury 05" on 8th August remains the same as the previous two issues, its scale will reach 24.9 billion yuan. It may become the second - most active bond, and the yields of the three bonds are expected to converge, with the yield of "25 Special Treasury 02" possibly decreasing by about 2BP [5][37].

Group 1: Report Industry Investment Rating - Not provided in the given content Group 2: Core Viewpoints of the Report - The restoration of VAT on some bonds is a one - time policy that does not affect the bond market trend. The new bond interest rate may increase by 2.8 - 5.4bps, and the new - old bond spread may be around 5.6 - 10.8bp [1][3] - The VAT restoration may increase total tax revenue by about 31.55 billion yuan. Banks' tax burden increase is the most obvious, and the tax scale increase of treasury bonds and local bonds is the most significant [2][16] - It is negative for newly - issued interest - rate bonds and newly - issued Tier 2 capital bonds, and positive for general credit bonds. It is beneficial for old bonds and negative for new bonds. Currently, the tax advantage of public funds in interest - rate bonds is strengthened, but there is a possibility of adjustment [3][18] - The central bank will optimize the bond market structure and institutional arrangements, and the tax system will be further optimized in the future. Whether the tax exemption advantage of public funds will be cancelled is a matter of future concern [4][19] Group 3: Summary by Related Catalogs Tax Policy Adjustment - Since August 8, 2025, VAT will be restored on the interest income of newly - issued treasury bonds, local government bonds, and financial bonds after this date. The interest income of bonds issued before this date will continue to be exempt from VAT until maturity [1][7] Bond Investment Tax Calculation - For general taxpayers, the VAT rate for bond investment is 6%, and the VAT and surcharges combined rate is 6.34%. The enterprise income tax rate is 25%, and assuming a 6% VAT rate, the enterprise income tax is 23.42% of the taxable interest or transfer spread [8] Previous Tax Preferences - Specific tax types: Interest income from treasury bonds and local government bonds is exempt from VAT and income tax; the income tax rate of railway bonds is halved; policy - financial bonds are exempt from individual income tax [9] - Specific institutions: Interest income from financial inter - bank transactions is exempt from VAT; public funds' interest income is exempt from income tax, and transfer income is exempt from VAT and income tax; asset management product managers use a simplified VAT calculation method [9] Post - adjustment Tax Rates - Public funds and other asset management products' VAT rate on interest income from newly - issued bonds after August 8, 2025 is 3.26%, while banks' self - operated investment in such bonds has a VAT rate of 6.34% [9][10] Impact on Different Institutions - It is generally negative for all types of institutions, with banks' self - operated tax cost increasing the most. The estimated VAT scale for banks' self - operated investment in newly - issued bonds is 232.73 billion yuan [14][15] Impact on Different Bond Types - Negative for newly - issued interest - rate bonds and newly - issued Tier 2 capital bonds, positive for general credit bonds. Negative for new bonds and positive for old bonds [3][18] Future Outlook - The central bank will optimize the bond market structure and institutional arrangements, and the tax system will be further optimized. Whether the tax exemption advantage of public funds will be cancelled needs to be continuously observed [4][19]

Core Viewpoint - The Hainan Free Trade Port will officially start its closure operation on December 18, with a focus on implementing a competitive tax system to support its development [1][3]. Tax Reform Measures - The Ministry of Finance will implement a step-by-step approach to tax reforms, including zero tariffs, low tax rates, and simplified tax systems, as outlined in the overall plan for Hainan Free Trade Port construction [1][3]. - Current preferential policies for corporate income tax and personal income tax will be maintained to attract high-end talent and quality enterprises to Hainan [3][4]. Expansion of Tax Policies - The range of zero-tariff goods will be expanded, and the list of taxable imported goods will be adjusted as needed [4]. - The duty-free shopping policy for outbound island residents will continue, with adjustments made to meet diverse consumer shopping needs [4]. Consumer Tax Policies - Research will be conducted on tax policies for imported goods consumed by residents on the island, with plans to allow tax-free purchases of certain imported products [4]. - The reform of sales tax, which includes the consolidation of various taxes such as value-added tax and consumption tax, will be advanced steadily and systematically [4].

Group 1 - The article discusses the flexibility of the American political system, highlighting three major reforms in the 20th century that helped the U.S. rise as a global superpower [1][2] - The first reform occurred from 1909 to 1916, preparing the U.S. for World War I, with significant changes in fiscal and monetary policies [2][3] - The second reform from 1944 to 1953 laid the groundwork for the Cold War, further solidifying the U.S. capital's global dominance [2] - The third reform from 1981 to 1988 helped the U.S. overcome global economic stagnation, reinforcing its international hegemony [2] Group 2 - The first reform established a modern tax system, introducing corporate and personal income taxes to support war funding, as previous tax revenues were insufficient [3][4] - The establishment of the Federal Reserve addressed the lack of a unified currency issuance system, alleviating the government's financial pressures during wartime [6][7] - The reforms also included institutionalizing war expenditures and allowing labor unions to form, which stimulated industrial growth and increased wages [7][9] Group 3 - Post-World War I, many reforms became outdated, leading to the repeal of regulatory policies and the abandonment of the gold standard, which contributed to the Great Depression [9] - The historical context of these reforms provides insights into current economic challenges, suggesting the potential need for new institutions to address crises, similar to the establishment of the Federal Reserve [9]

Core Insights - The demand for tax services in China is increasing due to the complex tax environment and ongoing reforms such as "business tax to value-added tax" (营改增) and personal income tax adjustments, leading to a projected market size growth from 14.07 billion yuan in 2012 to 34.88 billion yuan in 2024 [1][13]. Market Policy - Continuous tax system reforms in China are prompting the tax service industry to adapt and expand its service offerings, including accurate tax consultation and planning [6]. - The digitalization and modernization of tax administration are enhancing regulatory efficiency and transparency, creating a better business environment [6]. Industry Chain - The upstream of the tax service industry includes hardware and software necessary for tax management, while the downstream consists of various enterprises and individuals requiring tax services [9]. - The increasing number of registered businesses in China, totaling 60.87 million enterprises as of November 2024, is driving demand for tax services [11]. Development Status - The tax service market is expanding significantly, with over 70% of the market share attributed to tax consultation, verification, and agency services [13]. - The "Belt and Road" initiative is expected to open new growth opportunities in the international tax service market as Chinese companies expand globally [13]. Competitive Landscape - The tax service industry in China is highly fragmented, with many small firms; however, several firms have established strong market positions, such as Beijing Meiyuan Maoda Tax Firm and Zhongshui Huijin Jiangsu Tax Firm [15][17]. - The recognition of top-tier tax firms by the China Registered Tax Agent Association indicates a competitive environment where firms are striving for quality and client satisfaction [15][16]. Development Trends - Future tax services will increasingly leverage technologies like big data, cloud computing, and artificial intelligence to enhance service delivery and risk management [21]. - The demand for cross-border tax services is expected to rise as more Chinese enterprises engage in international business, necessitating expertise in international tax regulations [21].