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Table 1.
Source: EIU Country Report, China/Mongolia, 3rd Quarter 1996. The Economist Intelligence Unit.
Table 2.
Source: EIU Country Report, China/Mongolia, 3rd Quarter 1996. The Economist Intelligence Unit.
Chinese economic reform has one other characteristic that sets it apart from that of the former Soviet Union, the absence of democratic reforms. The current transition is being carried out within the “socialist framework” and for the most part is centrally controlled. Much of the world waited to see whether the economic transition would derail after the Tiananmen incident in 1989; it did not. However China did seem to be looking for a way of separating itself from reforms and democratic upheaval that were happening in the former Soviet Union[6]. In 1992, Deng Xiao Ping toured the southern economic zones - a journey significant for its highly symbolic approval of the reform and investment efforts he witnessed - and coined the phrase “socialist market economy”. Deng emphasized that this transition must promote the development of productivity, strengthen the national power and improve people’s standard of living, stating that, “..with all these achievements secure, our socialist foundation is greatly strengthened..”[7].
Within this backdrop, we will take a closer look at the system of reforms currently underway in the People’s Republic of China. This year marks the beginning of the Ninth Five-Year Plan (1996-2000). Examining the individual parts (the budget process, public expenditure, taxes, banking, the interaction between central and provincial governments, and the emerging need to transform the social safety net) will present a clearer picture of what has been accomplished by the macroeconomic reforms put in place in 1976 as well as what still needs to be done.
Taxation
The Pre-Reform Tax System
Prior to economic reforms, China’s tax structure was based on the Soviet model. Enterprises remitted their profit to the government, retaining only what was necessary to pay expenses. Revenues were collected by local governments, and a certain amount was filtered up to the central government. In 1984, this was replaced by a system of enterprise income taxation reform, in which companies were taxed on their profits, as the government tried to respond to economic imbalances created by the emerging private sector. The turnover tax (the Consolidated Industrial and Commercial Tax, or CICT), which had been the largest contributor to the government’s annual revenue, was replaced with a business tax, a product tax, and a value-added tax (VAT). These featured highly differentiated tax rates across sectors, types of good and service, and form of firm ownership. Most private firms paid a base tax rate of 33%, while most state-owned enterprises (SOEs) were nominally taxed at 55%.[14] In practice, however, taxes paid were governed by a contract responsibility system (CRS), in which enterprises negotiated individually with local government units. This system created conflict of interest because often the local government was both tax collector and enterprise owner. Not only were there differentiated rates which distort economic activity, there was little incentive for full tax remittance back to the central government under this system. (See Table 6 in Appendix, page 23, for a description of the tax structure from 1985-1991.)
1994 Reforms
In 1994, the Chinese government began to respond to these problems by enacting a series of reforms. The CICT was abolished and the following taxes were created or modified:
Enterprise Income Tax. This unified corporation tax taxes companies at a single 33% rate. Foreign enterprises and joint ventures are still enjoying lighter tax burdens, because of the fierce competition between regions to attract foreign investment, but these privileges are to be gradually eliminated.
Personal Income Tax. Operates on a sliding scale, with a maximum of 45%. Not yet comprehensively-implemented.
Value-Added Tax (VAT). Replaces the product tax of the CICT. Most goods taxed at 17%, but agricultural and food products will be taxed at 13%, and small-scale businesses will pay flat rate of 6%.
Consumption (Excise). Focuses narrowly on “luxury goods:” tobacco, alcohol, gasoline, and a few others.
Business tax for services. Service industries will face a business tax of 3% to 20% on sales in place of the VAT. This tax also will apply to transfer of intangible assets and the sale of real estate.[15]
Capital Gains. A capital gains tax was to be introduced in 1994, but its implementation was postponed because of concern over its adverse impact on China’s fledgling stock markets.
1996 Reforms
In 1996, China announced plans to reduce its import tariff rate from 35.9% to 23%, while abolishing preferences for certain goods and, importantly, eliminating exemptions from import tariffs (currently, over 80% of imports are exempt from import duties for various reasons). [16] This step alone should help to reduce the recent losses in customs revenue. The Ninth Five-Year Plan also includes provisions to introduce taxes on interest earnings and inheritances, policies designed to reduce income disparity.
Revision of Tax Collection Structure
In order to make the above tax policy changes effective, the tax collection system must be revamped and greatly improved. The current structure is based on a system of revenue contracts between enterprise and government unit, and between local and central governments. One of the necessary reforms involves tax exemptions, which local governments often have the authority to grant to enterprises who for one reason or another are unable to pay their taxes. This is a fundamental weakness in the Chinese fiscal system: local government has decision-making authority to grant exemptions on a tax the proceeds of which may in large part be assigned to governments above. Numerous conflicts of interest can appear to reduce incentives to enforce the tax at the local level.[17]
To address these changes, China in 1994 initiated the setting up of a centrally-managed National Tax Service. This would replace the contract system with a national “tax system,” based on uniform rules of tax assignment and tax sharing. Certain assignments will be assigned to local governments, and others to central government; others will be shared according to predetermined formulas. Interestingly, in 1995, a special police unit was set up to protect tax collectors under this new program.[18]
A potential obstacle to tax reform comes from local governments. Local governments have traditionally supported reforms. But this is because the reforms have usually given them greater autonomy. The tax system reforms need to restore some control over investment and spending back to the central government, which could encounter local opposition. Allowing local governments some discretion over local tax rates can give them some of the autonomy they desire, and provide greater incentive for intergovernmental cooperation.
Few reports exist at present on the implementation of these reforms. Certainly, the spirit and scope of the reforms has been well-received by analysts, though more changes are advocated. But it will take several more years to determine the success of the reform of tax collection structures at the local level.
Conclusions
In comparison with other countries undergoing transition from centrally-planned economic systems, China had the luxury of initiating its reforms at a time when it faced no macroeconomic or serious political crisis. It was able to adopt a two-track approach to economic reform: China continued state control of existing enterprises while loosening economic controls enough to permit growth of a new, nonstate sector. This was possible in part because the inefficient state sector was a small share of the economy, compared to most socialist nations.
China’s reform experience thus far has been one of “enabling” reform, allowing “marketization” instead of forcing “privatization,” getting government to “step out of the way” of the flows of commerce. The results have been good to excellent in the productive sectors, but the reform has not yet succeeded in the fiscal and monetary sectors, which are the domains of government. Here the government can’t step out of the way; it must build the proper tools and structures to manage these sectors.[39] It is in these areas, and in the efforts to reduce administration, dismantle SOEs, and provide an adequate social insurance system for displaced workers and affected citizens that China faces its true reform challenges.
To further evaluate how far China has come down the path of economic transition, we look to a definition of transition used by the World Bank, which describes these three components:
· Liberalization: freeing prices, trade and entry to markets from state controls, while stabilizing the economy. Stabilization is an essential component to liberalization.
· Clarifying property rights and privatizing them where necessary. Requires re-creating the institutions that support market exchange and shape ownership, and especially the rule of law.
· Reshaping social services and the social safety net to ease the pain of transition while propelling the reform process forward.
Examination of the Chinese experience shows that liberalization has taken place to some degree, though much reform of prices, trade and markets is still to be done. However, privatization and the assignment of property rights are still very undeveloped, and the most difficult parts of transition ahead are dependent on a still-unachieved transfer of the social safety net from enterprise-based to government control.[40]
Were China to continue to grow at the rates of the last two decades, it would surpass the United States as the world’s largest economy in less than twenty years. Though some tapering off in the growth rate is expected, China, with its sheer size and dynamism, is emerging as one of the world’s economic powers. The reform policy choices it makes during this period of transition thus have not only domestic but international significance, as China’s domestic economic and social stability will be felt internationally. The rest of the world has ample reason for assisting China in seeing these reforms through peacefully. Opening of economic activity within China and with the rest of the world will assist the process of political liberalization within the country, and will provide enhanced regional and global security.
Table 3. The Fiscal Situation in the Reform Period
Source: Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal Management and Economic Reform in the People’s Republic of China. Oxford University Press. Hong Kong: 1995, p.24.
Bibliography
“A Funny-Looking Tiger: What Can the Asian Tigers Tell Us About the Future of China?” The Economist. London. 17 August 1996:17-19.
“China: Tax Policy Changes May Not Be Welcome to Companies, But Are Good for China.” Global Economic Forum. Morgan Stanley & Co. Inc. 29 November 1995.
Ahmad, Ehtisham, Gao Qiang, and Vito Tanzi, ed. Reforming China’s Public Finance. International Monetary Fund. Washington, D.C.: 1995.
Chen Jinhua. “Report on the Implementation of the 1995 Plan for National Economic and Social Development and the Draft 1996 Plan for National Economic and Social Development.” (Delivered at the Fourth Session of the Eighth National People’s Congress on March 5, 1996). Beijing Review. 15-21 April 1996.
Child, John, and Martin Lockett. Reform Policy and the Chinese Enterprise, in the series Advances in Chinese Industrial Studies. Vol. 1, Part A. JAI Press Inc. Greenwich, CT: 1990.
China Financial Outlook. The Peoples Bank of China. China Financial Publishing House. Beijing: 1995.
EIU Country Profile. China, Mongolia 1994-95. The Economist Intelligence Unit. London: 1995.
EIU Country Report. China, Mongolia 3rd Quarter 1996. The Economist Intelligence Unit. London: 1996.
Harada, Kenji. “Are Finance Reforms in China Adequate?” in Asia Pacific Economic Review. URL: http://www.moshix2.net/APER/ISSUES/RISK.HTM. November 16,1996.
Harrold, Peter. China’s Reform Experience to Date. World Bank Discussion Papers #180. The World Bank:Washington, DC. 1992.
Hodder, Rupert. The Creation of Wealth in China: Domestic Trade and Material Progress in a Communist State. Belhaven Press. London: 1993.
Li, Kui-Wai. Financial Repression and Economic Reform in China. Praeger. Westport, CT: 1994.
Liu Zhongli. “Report on the Implementation of the Central and Local Budgets for 1995 and on the Central and Local Draft Budgets for 1996.” (Delivered at the Fourth Session of the Eighth National People’s Congress on March 5, 1996). Beijing Review. 15-21 April 1996.
McCormick, Barrett L., and Jonathan Unger. China After Socialism: In the Footsteps of Eastern Europe or East Asia?. M. E. Sharpe. Armonk, N.Y.: 1996.
Peck, Joyce, Peter Kung, and Khoon-Ming Ho. “Enter the VAT,” in The China Business Review. U.S.-China Business Council. Washington, D.C.: March-April 1994.
Soled, Debra E., ed. China: A Nation in Transition. Congressional Quarterly Inc. Washington, D.C.: 1995.
Stevenson-Yang, Anne. “New Reforms and Taxes for ‘94,” in The China Business Review. U.S.-China Business Council. Washington, D.C.: January-February 1994.
Tanzi, Vito, ed. Transition to Market: Studies in Fiscal Reform. International Monetary Fund. Washinton, D.C.: 1993.
Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal Management and Economic Reform in the People’s Republic of China. Oxford University Press. Hong Kong: 1995.
Wong, Christine. “China’s Economy: The Limits of Gradualist Reform.” in China Briefing, 1994, ed. by William A. Joseph. Westview Press. Boulder, CO: 1994
Yeung, Desmond. “China’s New Individual Income Tax Rates,” in The China Business Review. U.S.-China Business Council. Washington, D.C.: January-February 1994.
[1] Spence, Jonathan The Search for Modern China. London: W.W. Norton and Co., 1990.
[2] Harrold, Peter “China’s Reform Experience to Date”, World Bank Discussion Paper #180, 1992.
[3] Broadman, Harry “Meeting the Challenge of the Chinese Enterprise Reform”, World Bank Discussion Paper #283, 1995.
[4] Lele and Ofori-Yeboah, Unraveling the Asian Miracle. Brookfield: Dartmouth Press, 1996.
[5] World Bank Web Page , November 1996 (http://www.worldbank.org/html/extdr/offrep/eap/china.htm)
[6] Lele and Ofori-Yeboah Unraveling the Asian Miracle. Brookfield: Dartmouth Press, 1996.
[7] Gao, Shangquan China’s Economic Reform. Macmillan Press Ltd: London, 1996.
8 Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal Management and Economic Reform in the People’s Republic of China. Oxford University Press. Hong Kong: 1995.
[9] “China Budget Hurt By Tax Arrears.” Reuters Financial Service, 14 August 95.
[10] “Reform of China’s State-Owned Enterprises: A Progress Report of Oxford Analytica.” World Bank Web Page, November 16, 1996 (http://www.worldbank.org/html/prddr/trans/dec95/china.htm).
[11] Ibid.
[12] Hodder, Rupert. The Creation of Wealth in China: Domestic Trade and Material Progress in a Communist State. Belhaven Press. London: 1993, p. 80.
[13] Wong, Christine. “China’s Economy: The Limits of Gradualist Reform.” in China Briefing, 1994, ed. by William A. Joseph. Westview Press. Boulder, CO: 1994
[14] Stevenson-Yang, Anne. “New Reforms and Taxes for ‘94,” in The China Business Review. U.S.-China Business Council. Washington, D.C.: January-February 1994.
[15] Peck, Joyce, Peter Kung, and Khoon-Ming Ho. “Enter the VAT,” in The China Business Review. U.S.-China Business Council. Washington, D.C.: March-April 1994.
[16] “China: Tax Policy Changes May Not Be Welcome to Companies, But Are Good for China,” in Global Economic Forum. Morgan Stanley & Co. Inc. 1995.
[17] Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal Management and Economic Reform in the People’s Republic of China. Oxford University Press. Hong Kong: 1995.
[18] IWR Daily Update. Vol. 2, No. 104, 25 April 1995.
[19] Harrold, Peter “China’s Reform Experience to Date” World Bank Discussion Paper #180, 1992.
[20] Mehran and Quintyn, “Financial Sector Reform in China” Finance and Development, March 1996.
[21] Ibid.
[22] Tseng, W et al. “Economic reform in China: A New Phase” , IMF Occasional Paper #114, November 1994.
The Chinese Economy: Fighting Inflation, Deepening Reforms World Bank Country Study Washington, DC, May 1996.
[23] Ibid
[24] Xu, Dianqing “China: Contradictory Measures Frustrate Bank Reform” Center for International Private Enterprise, Washington DC, 1995.
[25] Mehran and Quintyn, “Financial Sector Reforms in China” Finance and Development, March 1996.
[26] Ibid.
[27] Xu, Dianqing “China: Contradictory Measures Frustrate Bank Reform” Center for International Private Enterprise, 1995.
[28] Forney and Sender “Ever So Careful: China cautiously extends the renminbi’s convertibility” Far Eastern Economic Review, July 4, 1996.
[29] Ibid.
[30] “Passing the Buck” Far Eastern Economic Review, October 10, 1996.
[31] Ibid.
[32] The Chinese Economy: Fighting Inflation, Deepening Reforms. A World Bank Country Study May, 1996.
[33] Forney, Matt “Trials by Fire” Far Eastern Economic Review, September 12, 1996.
[34] “Reform of China’s State-Owned Enterprises: A Progress Report of Oxford Analytica.” World Bank Web Page, November 16, 1996 (http://www.worldbank.org/html/prddr/trans/dec95/china.htm)
[35] Macartney, Jane. “Focus - China Unveils 5-Year Plan Low on Initiative.” Reuters Financial Service. March 5, 1996. Available through Lexis/Nexis ASIAPC library, China file.
[36] Ibid.
[37] Ibid.
[38] The Chinese Economy: Fighting Inflation, Deepening Reforms. A World Bank Country Study, May 1996.
[39] Wong, Christine. “China’s Economy: The Limits of Gradualist Reform.” in China Briefing, 1994, ed. by William A. Joseph. Westview Press. Boulder, CO: 1994, p. 51.
[40] “World Development Report Stresses Benefits of Sustained, Continued Reforms.” World Bank News, Vol. XV, No. 25. June 27, 1996.
Table 1.
Source: EIU Country Report, China/Mongolia, 3rd Quarter 1996. The Economist Intelligence Unit.
Table 2.
Source: EIU Country Report, China/Mongolia, 3rd Quarter 1996. The Economist Intelligence Unit.
Chinese economic reform has one other characteristic that sets it apart from that of the former Soviet Union, the absence of democratic reforms. The current transition is being carried out within the “socialist framework” and for the most part is centrally controlled. Much of the world waited to see whether the economic transition would derail after the Tiananmen incident in 1989; it did not. However China did seem to be looking for a way of separating itself from reforms and democratic upheaval that were happening in the former Soviet Union[6]. In 1992, Deng Xiao Ping toured the southern economic zones - a journey significant for its highly symbolic approval of the reform and investment efforts he witnessed - and coined the phrase “socialist market economy”. Deng emphasized that this transition must promote the development of productivity, strengthen the national power and improve people’s standard of living, stating that, “..with all these achievements secure, our socialist foundation is greatly strengthened..”[7].
Within this backdrop, we will take a closer look at the system of reforms currently underway in the People’s Republic of China. This year marks the beginning of the Ninth Five-Year Plan (1996-2000). Examining the individual parts (the budget process, public expenditure, taxes, banking, the interaction between central and provincial governments, and the emerging need to transform the social safety net) will present a clearer picture of what has been accomplished by the macroeconomic reforms put in place in 1976 as well as what still needs to be done.
Revenue, Expenditure and the Budget
One problem of major proportion facing the Chinese government is that central government revenues are growing at a much slower rate than the overall economy, and a growing budget deficit has resulted (see Table 3 in Appendix, page 20).[8] This is especially debilitating in the face of increasing demands from the surging economy for investment in infrastructure and with the need for investment in a reformed social insurance system that will come with economic disruptions caused by continuing liberalization. Expenditures have also been falling as a percentage of GDP, but are growing faster than revenue.
Several factors have been identified in the shrinking revenue-to-expenditures ratio problem:
Revenue
· Tax arrears on the industrial and commercial tax (CICT) from enterprises, which are growing as state-owned enterprises (SOEs) become more unprofitable in the face of increasing competition. At the end of 1994, these arrears amounted to 8.2 billion yuan (¥), and just seven months later, the figure had grown to ¥17.9 bn.[9]
· Tax exemptions granted by local governments to state-owned and private enterprises.
Expenditures
· Subsidies to the loss-making SOEs, in the form of loans or direct subsidies (see Table 4). China’s 1995 budget deficit was around a mere 1.5% of GDP. If policy lending by centrally controlled banks - most of which is, effectively, transfers to SOEs which can never afford to pay back these loans - is taken into account, the central government’s true deficit is 6% of GDP or higher.[10]
· Price subsidies. (Most of these were for urban food, and adjustments made in 1992 have reduced this drain on the budget.)
· Higher than expected increases in expenditures (in 1995, these were 18% higher than planned on the central level, with local government expenditures over 30% higher than in 1994.)[11]
· A drop of 10.7% in customs revenue from 1994 to 1995.
· Inflation-indexed interest subsidies on bank deposits and treasury bonds, which have been kept high by high inflation rates.
Table 4.
Source: Wong, Christine P.W., Christopher Heady, and Wing T. Woo. Fiscal Management and Economic Reform in the People’s Republic of China. Oxford University Press. Hong Kong: 1995.
For a country controlled by a Communist party, the government’s proportion of economic activity has been remarkably small, even before implementation of reform. In 1995, official government spending was just 11.6% of GDP. Off-the-books revenue raising schemes by local governments may mean the state’s total revenue is two times the official level.
The extra-budgetary revenue investment was dispersed, uncoordinated and did not fulfill the central government’s investment priorities. The central government faced growing infrastructure demands, but with shrinking (in proportionate terms) assets available, has been forced to reduce capital construction spending substantially. Also, expenditures on administration, culture, education, and welfare increased over the reform period, and reduced the government’s ability to spend on infrastructure.[12] (See Table 5 in Appendix, page 22.) The increases in administration spending are particularly troubling, because of government policies to reduce control of the economy and shrink some government bureaus.
One of the stated goals of the Ninth Five-Year Plan is to eliminate the budget deficit by year 2000. But this goal is highly unlikely to be achieved due to other conflicting goals, like spurring employment, which may mean increasing subsidies to unprofitable SOEs; reducing regional income disparities; and strengthening agriculture, which is seen as a key to controlling inflation.
Christine Wong, an expert on the Chinese financial system, identifies three necessary changes to restore the health of the budget: First, the tax administration must be strengthened. Second, the tax structure must be reformed so that it is neutral across products and sectors. Third, the revenue-sharing system between local, provincial and national levels of government must be revamped, with clearer tax assignments in line with each levels set of responsibilities. The central government’s control over the tax system and share of total revenues will likely have to be increased. The next two sections will address these proposed changes.[13]
Taxation
The Pre-Reform Tax System
Prior to economic reforms, China’s tax structure was based on the Soviet model. Enterprises remitted their profit to the government, retaining only what was necessary to pay expenses. Revenues were collected by local governments, and a certain amount was filtered up to the central government. In 1984, this was replaced by a system of enterprise income taxation reform, in which companies were taxed on their profits, as the government tried to respond to economic imbalances created by the emerging private sector. The turnover tax (the Consolidated Industrial and Commercial Tax, or CICT), which had been the largest contributor to the government’s annual revenue, was replaced with a business tax, a product tax, and a value-added tax (VAT). These featured highly differentiated tax rates across sectors, types of good and service, and form of firm ownership. Most private firms paid a base tax rate of 33%, while most state-owned enterprises (SOEs) were nominally taxed at 55%.[14] In practice, however, taxes paid were governed by a contract responsibility system (CRS), in which enterprises negotiated individually with local government units. This system created conflict of interest because often the local government was both tax collector and enterprise owner. Not only were there differentiated rates which distort economic activity, there was little incentive for full tax remittance back to the central government under this system. (See Table 6 in Appendix, page 23, for a description of the tax structure from 1985-1991.)
1994 Reforms
In 1994, the Chinese government began to respond to these problems by enacting a series of reforms. The CICT was abolished and the following taxes were created or modified:
Enterprise Income Tax. This unified corporation tax taxes companies at a single 33% rate. Foreign enterprises and joint ventures are still enjoying lighter tax burdens, because of the fierce competition between regions to attract foreign investment, but these privileges are to be gradually eliminated.
Personal Income Tax. Operates on a sliding scale, with a maximum of 45%. Not yet comprehensively-implemented.
Value-Added Tax (VAT). Replaces the product tax of the CICT. Most goods taxed at 17%, but agricultural and food products will be taxed at 13%, and small-scale businesses will pay flat rate of 6%.
Consumption (Excise). Focuses narrowly on “luxury goods:” tobacco, alcohol, gasoline, and a few others.
Business tax for services. Service industries will face a business tax of 3% to 20% on sales in place of the VAT. This tax also will apply to transfer of intangible assets and the sale of real estate.[15]
Capital Gains. A capital gains tax was to be introduced in 1994, but its implementation was postponed because of concern over its adverse impact on China’s fledgling stock markets.
1996 Reforms
In 1996, China announced plans to reduce its import tariff rate from 35.9% to 23%, while abolishing preferences for certain goods and, importantly, eliminating exemptions from import tariffs (currently, over 80% of imports are exempt from import duties for various reasons). [16] This step alone should help to reduce the recent losses in customs revenue. The Ninth Five-Year Plan also includes provisions to introduce taxes on interest earnings and inheritances, policies designed to reduce income disparity.
Revision of Tax Collection Structure
In order to make the above tax policy changes effective, the tax collection system must be revamped and greatly improved. The current structure is based on a system of revenue contracts between enterprise and government unit, and between local and central governments. One of the necessary reforms involves tax exemptions, which local governments often have the authority to grant to enterprises who for one reason or another are unable to pay their taxes. This is a fundamental weakness in the Chinese fiscal system: local government has decision-making authority to grant exemptions on a tax the proceeds of which may in large part be assigned to governments above. Numerous conflicts of interest can appear to reduce incentives to enforce the tax at the local level.[17]
To address these changes, China in 1994 initiated the setting up of a centrally-managed National Tax Service. This would replace the contract system with a national “tax system,” based on uniform rules of tax assignment and tax sharing. Certain assignments will be assigned to local governments, and others to central government; others will be shared according to predetermined formulas. Interestingly, in 1995, a special police unit was set up to protect tax collectors under this new program.[18]
A potential obstacle to tax reform comes from local governments. Local governments have traditionally supported reforms. But this is because the reforms have usually given them greater autonomy. The tax system reforms need to restore some control over investment and spending back to the central government, which could encounter local opposition. Allowing local governments some discretion over local tax rates can give them some of the autonomy they desire, and provide greater incentive for intergovernmental cooperation.
Few reports exist at present on the implementation of these reforms. Certainly, the spirit and scope of the reforms has been well-received by analysts, though more changes are advocated. But it will take several more years to determine the success of the reform of tax collection structures at the local level.
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