Social Sciences in China (Chinese Edition)

No.6, 2019

Performance Evaluation of Government Financial Revenue: A Value Tool for Realizing the Policy of Cutting Taxes and Administrative Charges

(Abstract)

Zheng Fanghui and Fei Rui

Finance is the foundation of national governance, and the tax burden is the setting that quantifies the degree to which government rules for the people. The objective requirements of a proactive fiscal policy of cutting taxes and administrative charges are reviewing policy logic, evaluating policy performance, and driving policy implementation. Since the soft constraints on government finance are the main cause of increases in the macro tax burden, implementing a strategic plan of overall budget performance management and performance evaluation of government financial revenue, combined with instrumental and value rationality, provides a limiting mechanism and a system of standards for rationally curbing the unrestrained nature of government revenue maximization and for reconstructing national governance relationship. In this system, the cost of the burden of taxes and administrative charges reflects an orientation toward results, while tax pain foregrounds an orientation toward degree of satisfaction. The two become key indicators and important dimensions of evaluation. As is evident from both theory and experience, to avoid the “North paradox,” stimulate popular dynamism, and reverse engineer institutional reform, performance evaluation of government revenue can serve as a corrective mechanism for errors and biases in government financial policy-making and as a way of gauging tax levels. This will effectively curb tax increases, reduce the cost of taxes and administrative charges and lessen tax pain, as well as increasing the credibility and administrative capacity of public finance.