Core Viewpoint - The article highlights the increasing scrutiny and regulation by the government to curb the practice of local governments imposing fines as a means of revenue generation, particularly in light of economic challenges and declining fiscal revenues [3][4]. Group 1: Regulatory Actions - The Ministry of Justice exposed a case where a local government set mandatory fines and penalties, indicating a systematic approach to revenue generation through administrative penalties [3]. - The State Council issued guidelines to standardize and supervise the setting and implementation of fines, focusing on lawful and scientific practices [4]. - Various provinces have intensified audits and oversight on irregular charges, revealing inconsistencies and improper enforcement practices in local jurisdictions [5]. Group 2: Financial Trends - National penalty and confiscation revenue saw a decline of 4.3% year-on-year in the first half of the year, with the drop accelerating compared to the first quarter [6]. - Penalty revenue constitutes about 10% of non-tax revenue and has a relatively low share in local general public budget income [6].

Core Viewpoint - The national confiscation and penalty income has decreased by 4.3% year-on-year in the first half of this year, prompting the government to strengthen regulatory measures to curb local governments' impulse to increase penalty income through improper means [4]. Group 1: Regulatory Measures - The Ministry of Justice has exposed a case where a local government set mandatory monthly targets for administrative penalties, which led to a uniform pattern of penalties across various towns [1]. - The State Council has issued guidelines to prohibit the setting of penalty targets, emphasizing that such practices undermine the seriousness and authority of administrative law enforcement [1][2]. - Since March, a nationwide campaign has been launched to regulate administrative law enforcement, focusing on issues that businesses have strongly reported [2]. Group 2: Financial Context - Local fiscal revenue, particularly tax revenue, has been under pressure due to economic downturns, tax reductions, and a sluggish real estate market, leading some localities to engage in excessive fines and penalties to compensate for revenue shortfalls [2][3]. - The national confiscation and penalty income, which includes various forms of fines and confiscated assets, constitutes about 10% of non-tax revenue and has a relatively low share in local general public budget income [4].