IMF Says China's Complex Fiscal System Needs ‘Crucial’ Overhaul
- Local and regional governments account for 85% of spending
- System is the world’s most decentralized, fund says in paper
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China’s sprawling local government financing system needs “crucial” reforms to increase consumption, build prosperity and encourage economic rebalancing, the International Monetary Fund said.
Among the IMF’s recommendations is to fund local governments by imposing recurring property taxes and adding local surcharges to national individual income taxes.