Yicai, a newspaper based in China, discussed the issue of local governments falsely inflating their fiscal revenue figures, as revealed in recent audit reports across the country. This has become a persistent problem, motivated by the desire to bolster performance metrics for government officials.
The article cites several examples from audit reports in different provinces. In Guangdong, 3 cities and 3 counties were found to have increased fiscal revenue by 17.101 billion RMB through state-owned enterprise asset purchases. Hebei’s audit found 1 city and 7 counties had artificially inflated revenue by 2.495 billion RMB through fake asset disposals and overpayments. Audits in Sichuan, Qinghai, Inner Mongolia, and Liaoning also uncovered hundreds of millions to billions of RMB in falsified revenue.
Experts argue this practice conceals true fiscal deficits, amplifies local financial risks, and distorts central government’s understanding of local fiscal conditions, potentially leading to misguided policymaking and damaging government credibility.
To address the problem, the report suggests that local governments realign performance incentives away from rigid revenue targets. Ongoing tax and fiscal reforms to bolster local fiscal autonomy could also help reduce the pressure to fabricate numbers. Stronger oversight and strict accountability for responsible officials are also recommended.
The article also notes audit reports have proposed improving revenue collection management, data sharing across departments, and plugging institutional loopholes to ensure comprehensive and accurate fiscal revenue reporting.
Source: Central News Agency, August 20, 2024
https://www.cna.com.tw/news/acn/202408200177.aspx