The State Council has announced the revised Regulations on the Implementation of the Budget Law of the People's Republic of China (hereinafter referred to as the Regulations), which will come into force on October 1, 2020. Officials of the Ministry of Justice and the Ministry of Finance recently answered questions on the amendments to the Regulations. The two authorities said that the revision of the Regulation mainly reflects the results of deepening the reform of the fiscal and tax systems, including the state Council's regulations on deepening the reform of the budget management system issued after the implementation of the budget law. At the same time, the relevant provisions of the budget Law have been detailed and clarified, and corresponding provisions have been made on the scope of budgetary revenues and expenditures, transfer payments, local government debts and other matters in accordance with recent practice.

We will standardize budget preparation and budget disclosure

The Regulations specify the time frame for compiling the draft budgets, and stipulate the contents of the budgets for the central and local general public budgets, budgets for government-managed funds, budgets for state capital operations, budgets for social insurance funds, and budgets for all departments and units.

The Regulations make provisions on the budget management of departments mainly from three aspects: First, unify the budget management of departments. In accordance with the requirements for full-caliber budget management, it is stipulated that the budgets of all departments shall reflect all budgetary funds allocated to their departments and their subordinate units in the budgets of general public budgets, government-managed funds budgets and state capital operations budgets. Second, we will clarify the scope of departmental budgets and revenues. Third, we will improve the way we manage project expenditures.

The regulations detail the disclosure of transfer payments, specify that government debts, operating funds of government agencies, government procurement and funds from special financial accounts should be disclosed to the public in accordance with regulations, and at the same time specify the disclosure of budgets and final accounts of departments and affiliated institutions. According to the Regulations, unit budgets and final accounts shall be disclosed to the public according to their functions. Classified according to its economic nature, basic expenditure should be disclosed to the public.

Two department, said the regulations to strengthen the budget management, reasonable arrangement of progress payments, to speed up the transfer budget fund issued and make that clear, at the same time, rules for violation of laws and administrative rules and regulations), collection, reduction and exemption, collection and refund in advance budget income, shall be ordered to correct and prevent local tax "GuoTouShui" is helpful to strengthen the management of budget implementation.

We will standardize the financing mechanism for local governments to borrow money

The Regulations specify and specify the budget law's provisions on government debt management, requiring the establishment and improvement of an index system for assessing local government debt risks, organizing assessments of local government debt risks, providing early warning to regions with high debt risks, and supervising the resolution of debt risks. The State Council may extend loans to the governments of provinces, autonomous regions and municipalities directly under the Central Government for loans made by foreign governments and international economic organizations. Where the government of a province, autonomous region or municipality directly under the Central Government bears the direct responsibility for repayment, it shall be brought into the budget administration at the corresponding level. The governments of provinces, autonomous regions and municipalities directly under the Central Government may re-lend to the governments at lower levels loans made by foreign governments and international economic organizations on loan from the State Council.

Liu Kun, minister of Finance, said the rules will help establish a standardized financing mechanism for local governments to raise debt, strengthen management of local government debt, strengthen supervision over local government debt, effectively prevent and defuse debt risks, and promote the sustained and sound development of economic and social programs.

We will improve the quality and efficiency of government funds

Comprehensively implementing budget performance management is an inherent requirement for modernizing China's governance system and governance capacity, and an important part of deepening fiscal and tax reform and establishing a modern fiscal system. The regulations comply with the principles of budget law about the performance of the budget at various levels shall be particular about, the budget law about performance management by objectives, expenditure performance evaluation results, to carry out performance evaluation rules, on the basis of further defined performance evaluation concept, regulation performance evaluation results as the basis of improved after management and prepare the annual budget.

"Byelaw" regulation, to further strengthen performance management to further build the comprehensive budget performance management pattern, perfect the budget performance management system, to strengthen the budget performance management supervision and restraint, to improve the efficient use of funds, promote the further focus to finances at various levels to do a good job of "six stability", to carry out the "six protect" tasks.

The two authorities said they will strictly implement the budget law and the Regulations, and release relevant systems and measures in a timely manner. In accordance with the principle of "whoever enacts the regulations shall clean up the matter", revise and clean up the budget management rules and regulations inconsistent with the Regulations in a timely manner to ensure that the rules and regulations are in compliance with the law.

Source: Ministry of Finance, PRC