ABSTRACT
One cannot address the subject of intergovernmental fiscal relations in China without also addressing the subjects of tax policy and tax administration. The three are inextricably linked (Bahl 1994). China’s intergovernmental fiscal system is based on sharing rather than assignment, and is characterized by the following:
All tax rates and bases are centrally determined.
Each local government is given a designated share of revenue collections within its boundaries,
Tax administration is a shared responsibility between central and local governments. 1
Grants are distributed among local governments on an ad hoc basis.
