Page 9 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2021 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2022

In 2021, finance departments conscientiously implemented the decisions and
plans of the Party Central Committee and the State Council, adhered to the Budget

Law and its implementation regulations and the Guidelines on People’s
Congresses Expanding the Focus of Budget Review and Oversight to Expenditure
Budgets and Policies, and worked as required by the outcomes of the NPC’s

deliberations and their comments on the budgets. With a commitment to
enhancing the quality, efficiency, and sustainability of our proactive fiscal policy,
we refined tax and fee reduction policies and put them into practice, enhanced

support for efforts to ensure employment, living standards, and the operations of
market entities, and implemented the regular mechanism for the direct allocation
of government funds to prefecture- and county-level governments while

expanding the scope of its application. We strengthened funding safeguards for
public wellbeing and key areas, defused local government debt risks through

prudent measures, deepened reform of the fiscal and tax systems, tightened
management over government finance, and ensured full implementation of
relevant policies. These efforts provided robust support for fulfilling the year’s
main targets and tasks in economic and social development.

 We made our fiscal and tax policies more targeted and effective, helping

keep major economic indicators within an appropriate range.
We stepped up the unified management of fun ds, and kept government
spending at the necessary scale. A ceiling of 3.65 trillion yuan was set on new local

government special-purpose bonds. We maintained an appropriate tempo in the
issuance and utilization of bonds according to changes in the economic situation,

starting out slow then picking up the pace over the course of the year, and actively
expanded effective investment. We continued to cut taxes and fees, adjusted
temporary epidemic response policies introduced in 2020 on a

category-by-category basis, and adopted some new measures such as raising the
VAT threshold for small-scale taxpayers, cutting corporate income tax for micro
and small businesses, and expanding the scope of the VAT credit refund policy’s

application in advanced manufacturing. Furthermore, we cancelled, waived, or
reduced a portion of administrative charges and payments to
government-managed funds. Additional tax and fee cuts exceeded 1 trillion yuan

for the year. In addition, tax payments were temporarily postponed for micro,

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