What Is Recurring Revenue?

Recurring income is the assets or debts (or two) obtained by a country or enterprise or individual in its continuous and recurring business activities as a result of the production or delivery of goods, the provision of labor services, or other activities. Or both), or financial revenue that can be obtained continuously and steadily in each financial year.

Recurring income

Recurrent income is a category in the fiscal double budget system, which is relative to constructive income. After implementing the double budget system,

How to make recurring income a source of local available financial resources

In conventional fiscal revenue and expenditure analysis, we mostly focus our perspectives on total revenue, general budget revenue, intergovernmental transfer payments, and even local available financial resources. With the increase in the three expenditures of agriculture, education, science and technology, which are required by law to be higher than the local fiscal recurring income (hereinafter referred to as "recurring income"), the recurring income has become more of our concern. But the scope involved is just a unified caliber, calculate several sets of numbers, and compare the fluctuations between the increases. Where does the recurring income come from, how is it related to total income and local available financial resources, how does the municipal financial department guide the current and county levels to consolidate the foundation of recurrent income, making it the source of local available financial resources Living water has become our problem.

I. Subsets and intersections: Recurring income and financial resources are significantly related

Recurring income refers to fiscal revenue that can be continuously and steadily collected in each fiscal year obtained by the state as a manager of social and public affairs. The definition of the scope of recurring income has gone through two stages: the first stage: At the beginning of the implementation of the tax-sharing fiscal system, the scope of local fiscal recurring income was defined as tax revenue (excluding urban maintenance and construction tax, fixed asset investment direction). Adjustment tax, cultivated land occupation tax), state-owned asset operating income, state-owned enterprise plan loss subsidies, other general income (excluding administrative fee income, confiscated income, special income, sea area mining area user fee income and other one-time income), The central government's tax rebates to local governments. Second stage: In 2004, according to the relevant national laws and regulations, the increase in expenditures on education, science and technology, and agriculture arranged at various levels of the budget should be higher than the increase in recurrent fiscal revenue. In order to clarify the definition of recurring income and implement the "three higher than", the Ministry of Finance issued the "Opinions on Uniformly Defining the Standard of Local Fiscal Recurring Income", which clarified fiscal recurring income as: Local general budget revenue ( Excluding one-time income such as urban maintenance and construction tax, confiscated income, special income and operating income of state-owned assets); VAT and excise tax refunds approved by the central government, basic income tax returns, and export tax refund bases returned; the generality increased by the central government through income tax sharing reforms Transfer payment income. At the same time, the opinion stipulates that due to the inconsistent progress in the reform of the "two lines of revenue and expenditure" in various places, whether the administrative fees and charges are included in the local fiscal recurring income range, the local financial departments and the relevant people's congresses are invited to agree. Comparing the first and second phases, the operating income of state-owned assets was excluded from regular income in the second phase because of its instability. At the same time, all localities have also excluded administrative charges in accordance with the practice, which is consistent with the relevant content of the first stage. Based on the above policies and actualities, the formula for calculating recurring income is as follows:

Recurrent income = general budget income-urban construction tax-confiscated income-special income-operating income-administrative income + tax refund + income tax refund.

The above items are excluded from general budget revenue. We believe that the main reasons are the obvious nature of administrative income compensation, the scattered dispersion of confiscation and confiscated income, the instability of state-owned asset operating income, and the collection of special income separately for special purposes. In addition, urban maintenance and construction tax and cultivated land occupation tax are excluded from the tax due to their exclusive nature.

Having clarified the connotation and extension of recurrent income, let us examine the relationship between it and the available financial resources. The formula for calculating local financial resources that is well known and widely used is:

Local available financial resources = local fiscal revenue of a certain place + tax rebate subsidy income of a certain place + fixed subsidy income of a certain place + year-end settlement subsidy income of a certain place-special solution for a certain place

We can see that the local available financial resources are based on the general budgetary income and added to the lower and upper levels, including special funds, transfer payments, tax rebates and other content. Compared with the formula for recurring income, the recurring income excludes the unstable components of the general budget revenue, and after removing the above unstable parts, it can be said that only the general budget revenue is left with taxes, and it does not include urban maintenance. The construction tax and cultivated land occupation tax are added together with the tax return derived from the tax. Therefore, recurrent income is not independent of local available financial resources, it is a subset of local available financial resources.

According to different sources, the government's available financial resources can be divided into two categories: endogenous and exogenous financial resources. The so-called endogenous financial resources are the financial resources that the government at its own level can independently control and use through the labor of its own financial resources. The exogenous financial resources refer to the financial resources provided by other stakeholders outside the government at the same level. Analyzing the components of recurring income, it is not difficult to see that recurring income is not entirely endogenous financial resources, but also connected with exogenous financial resources. Recurring income is the intersection of endogenous and exogenous financial resources.

Through a dialectical study of the relationship between recurrent income and financial resources, we can find that there are significant correlations between recurrent income and available financial resources: First, recurrent income is a subset of financial resources and exists independently as a component of financial resources Second, recurring income is the most stable, direct, and deferred component of financial resources, and it is the backbone of financial resources. Third, compared to current and subordinate income, current income is more dynamic and reliable. More dependable.

Development and checks and balances: The changing trend of Jinzhong's recurrent income

In 2006, the recurring income scale of Jinzhong City was 20.578 trillion yuan, an increase of 26.517 million yuan over 2005. The average growth rates of the city were 24.40% in development zones, 20.17% in municipal level, 19.57% in Shouyang, and 17.68% in Heshun. Yuci 17.61%, Xiyang 17.48%, Zuoquan 17.14%, and Taigu 16.12%. Below the city's average are Lingshi 13.88%, Yushe 11.99%, Pingyao 11.96%, Jiexiu 8.72%, and Qi County-0.56%. The reasons why these counties (districts, cities) are lower than the city's average increase are nothing more than the following: One is represented by Qi County and Yushe. The three indicators of total income increase, general budget income increase, and financial increase are lower than the city's average. Level, affected by this, there is a negative increase in recurrent income; the second is represented by Pingyao, although the three indicators of total income growth, general budget income growth, and financial growth are higher than the city's average level, but the quality of income in the components is not high Among them: Administrative fee income increased by 54.79%, confiscated income increased by 44.13%, and special income increased by 2635.24%. The above three items increased by 443.87% year-on-year, which became an important factor driving general budget revenue, total revenue, and even financial growth. The recurring income is eliminated in the process, which forms no driving force for growth, so the recurring income is also lower than the city's average level. The third is represented by spirit stone and Jiexiu. The total income scale ranks at the forefront of the city. The total income and general budget Of the three indicators of the increase in income and financial resources, only one was slightly higher, and the other two were significantly lower than the city's average.

As for how to analyze the city's recurrent income by county in the past two years, we intend to take the form of statistical description and summarize it. Specifically, it is a three-dimensional analysis and summary of the regular income of 13 units including the city level in the past two years. Due to individual differences, in-depth personality analysis is not performed, but only at the macro level. measure.

Through the statistical description of the regular income of the 13 units in the city, we can draw the following conclusions: From the arithmetic mean of the regular income of the 13 units, the increase of 14.65% is lower than the total increase of fiscal revenue of 19.45% , But also maintained double-digit growth, meanwhile, the median increase of 14.21 percentage points, and the increase in the minimum and maximum levels also confirmed the strong growth of the city's current income; standard deviation of 13 units of current income 2006 It reached 15.54% annually, as a reference value reflecting the degree of dispersion between the mean values, and continues to expand; From the peak, that is, the flatness of the distribution of the regular income of 13 units and the standard normal distribution, although the value was two years, the value Both are negative. That is to say, the distribution of the regular income of the 13 units in the city in the two years is relatively flat. But in 2006, it still showed a relatively steep trend compared to 2005; From the perspective of skewness and degree of asymmetry, the two years showed a positive skewness, that is, the value of the mode was small, and the difference between the arithmetic mean and the mode was Positive values, the trend of positive skewness in 2006 has further strengthened; From the perspective of the total distance, that is, the difference between the highest and the lowest recurring income of the 13 units, the gap further widened in 2006, an increase of 16.52 This percentage has increased by 42.57 million yuan over the previous year. Looking at the structure of the city's recurring income in the past two years, it is not difficult to see that: the proportion of tax revenue in the recurring income has increased, rising by 3.47 percentage points; the two tax refunds have a clear downward trend, and the value-added tax and consumption tax returns have decreased. 2.01 percentage points, the return on income tax base dropped by 1.46 percentage points. The structure confirms the trend: In 2006, recurring income increased by 14.00%, of which, tax revenue increased by 19.85%, value-added tax and consumption tax refund increased by 2.89%, and income tax base refund increased by zero. It is precisely the difference in growth rate that determines the proportion change.

Utilizing the completion of four indicators including the total financial revenue, financial resources (general budget financial resources, excluding prospecting and mining rights revenue), general budget revenue, and recurring revenue of the city and counties (districts, cities) in 2005 and 2006, The absolute value is different because of the economic level, financial resources reserve, and level of collection and management efforts of each county (district, city). The horizontal comparison is meaningless. Therefore, we try to calculate the increase of the above four indicators in order to match the correlation between the indicators and combine the correlations. Background data indicators, a deep analysis of Jinzhong's county-level fiscal available financial resources, mainly rely on the increase of local taxes and superior subsidies: the city's general budget financial resources (excluding two rights, the same below) increased by 30.58% in 2006, of which Only 38.93% of the amount comes from general budget revenue, and the remaining 61.07% is basically concentrated on higher level subsidies; the increase in higher level subsidies has increased the proportion of available financial resources at the county level due to the increase in special funds; Incremental return from the chain, the province and the city to implement the financial concentration policy, and the city to the two central tax reductions The base deduction policy makes the city's county level get limited financial resources from the increase in the two taxes. Because most of the non-tax income is repatriated income for special funds, the proportion of available financial resources is also small. Therefore, in order for the counties to fully take the initiative to control their financial resources, they must change their perspectives and think about how to increase their regular income. Because from a horizontal comparison, the proportion of city-level financial resources in the city's total financial resources remained basically the same between years, and the county-level level has increased year by year. Increasing the proportion of financial resources at the county level In addition to the success of the construction of financial resources, the general transfer payments, additional wages and special transfer payment subsidies of the central and provincial governments have also increased the financial resources at the city and county levels to a certain extent. However, from another perspective, in recent years, there have been phenomena such as the increase in financial resources and the increase in fiscal revenue, the relative decline in local available financial resources, and the obvious decline in fiscal self-sufficiency. Jinzhong City s total fiscal revenue in 2006 increased by 102.127 million yuan year-on-year, an increase of 19.45%. General budget revenue increased by 47.76 million yuan, an increase of 24.60%, and financial resources increased by 121.79 million yuan, an increase of 30.58%. The total revenue and general budget revenue indicate that the province's two rights incomes are allocated. The province returned part of the funds through special funds, which made the level of special funds higher than the increase in total income, which in turn boosted the financial year-on-year level. If we correspond to the relevant figures in the general budget revenue, we can see that Jinzhong's financial self-sufficiency is decreasing: in 2005, the proportion of general budget revenue to financial resources was 48.38%, and in 2006 it fell by 2.21 percentage points.

In addition, in recent years, in order to ensure the stability and development of society and the basic expenditure needs of governments at all levels, the governments at both the city and county levels have worked hard to tap the potential of increasing income. Distorted fiscal revenue structure. This way of relying on income items that are not highly related to the economy, such as land income, administrative fees, and confiscated income, to drive income growth has no stamina. In 2006, the city's general budget revenue was not highly related to the economy. The income projects completed totaled RMB 918.08 million, accounting for 38.42% of the general budget revenue, which was an increase of 1.89 percentage points from the 36.53% of the previous year. The negative effects of the substantial increase in non-tax revenue are that it stimulates the growth of fiscal expenditure without subsequent financial guarantees, which further exacerbates the contradiction of future fiscal revenue and expenditure; the second is that the proportion of non-tax revenue in general budget revenue is significant, indicating that the actual Sexually available financial resources are relatively small, with weak financial security capabilities, and great financial difficulties. Third, the shift in the status of the main body of fiscal revenue has reduced the government's disposable financial resources and affected the healthy and normal operation of the national economy. Therefore, income items that are not highly relevant to the economy, which are eliminated from the concept of recurring income, are more in line with the value definition and target grasp of local directly available financial resources.

Third, face up and adjust: the only way for recurring income growth

The basic principle of the reform of the fiscal management system of the tax-sharing system in 1994 was "the stock remains unchanged, incremental adjustments have been made, the central government's macro-control capabilities have been gradually improved, and a reasonable fiscal allocation mechanism has been established." In a nutshell, the tax-sharing system leaves a small portion of the large tax and a large portion of the small tax to the locality in terms of income division. It is the "inverted pyramid" distribution pattern of financial resources among Chinese governments at all levels that has led to the central financial resources being the largest, the provincial level being the second, and the prefecture, county, and township levels decreasing. Of course, this distribution of financial resources is considered from the perspective of unity of powers and financial powers, but at the city and county level, due to the reform of the tax sharing system, the city's and county's fiscal incremental distribution share has been significantly reduced, revenue growth has been weak, and the pressure on revenue and expenditure has increased significantly. Some counties have basically become the "financial finance", and the government's ability to regulate and control the economy is low, and a hematopoietic mechanism for the healthy growth of fiscal revenue cannot be formed. So, how to understand the impact of the tax sharing system on the income of cities and counties? The tax sharing system stipulates that the central government's return to the local area is based on the previous year's return base and then the return rate is increased by a factor of 0.3 multiplied by 0.3. Returning to the locality in proportion to the absolute amount of the two taxes above resulted in an increase in the proportion of the central government's returning to the locality, and the weakening of local financial strength affected the performance of local financial functions. If the above text is still a little bit jerky, let's try the two-year tax and return data for the past four years to illustrate: through the above table, we can see that in the past four years, Jinzhong City's fiscal revenue and the central government tax have been maintained High growth, but the proportion of the increase in the tax return to the increase in the plan has shown a linear decline. In recent years, the increase in the return of the two central tax revenues to the central government's increase in the pre-planned city has decreased by 1-1.5 percentage points per year, which indicates that the faster the two taxes increase, the greater the 1: 0.3 decrease. Conducive to the enthusiasm of cities and counties to organize two taxes. At the same time, the share of central tax rebate in the above two central taxes has fallen from 29.59% in 2003 to 14.42% in 2006, an average annual decrease of 5.06 percentage points. According to the calculation of the distribution ratio, in 2006, the central government concentrated more financial resources of RMB 40.103 million, and Jinzhong lacked such financial resources equivalent to the city's one-year capital construction expenditure. The central government has too many local financial resources, which is not conducive to the overall planning of local financial resources, and the pressure on local fiscal revenue and expenditure to increase has increased.

It is precisely in accordance with the current fiscal management system that the central government's incremental tax rebate rate for local governments has gradually decreased, which has seriously affected the growth of local financial resources. At the same time, this also explains to some extent why the increase in total fiscal revenue, and even general budget revenue, is higher than the increase in regular revenue.

As such, some people in the grass-roots theoretical community believe that under the current system, the principle of concentration and distribution is not fully reflected, so they have proposed to reform the current calculation formula for the "two taxes" incremental return, so that local tax returns can indeed receive " "Two taxes" increase of 30% and other suggestions. But out of the shackles of the role, we can find that countries with relatively mature market development and relatively balanced economic development among regions have focused on special transfer payments. Therefore, such countries and regions are more willing, and it is also suitable to reflect the central government's macro-control over the local area by means of "centralization and redistribution first," and concentrate financial resources on major affairs. So, how to increase the available financial resources of Jinzhong City through certain industrial guidance and institutional innovation, especially the most direct and reliable regular income among available financial resources? We believe that we need to address the following aspects:

Further strengthen the construction of financial resources and establish a long-term guarantee mechanism for regular income. In 2006, Jinzhong City gained a lot in the investment invitation meetings such as "Shanghai Fair" and "Hong Kong Fair". A total of 175 projects were signed, with a total investment of 85.219 billion yuan, an agreement to introduce funds of 39.292 billion yuan, and loan funds. 8.933 billion yuan, the highest in the past years, of which the industrial and commercial projects that have made outstanding contributions to tax revenue accounted for the majority. At present, all counties (districts, cities) are taking the time to promote the project to take root as soon as possible. At the same time, we must also solve the problems of the implementation of the relay of the Double Hundred Projects and 8553 Industrial Promotion Projects of the previous year, so that Jinzhong City s fiscal revenue With both realistic financial resources and future financial resources, it will truly build Jinzhong's regular income growth on a positive and stable basis.

Under the current fiscal system, it is urgent to adjust the industrial structure and accelerate the reform of the circulation industry. Take the composition of general budget revenue in developed areas in the south as an example, the proportion of business tax and two income taxes reaches more than 60%, while deed tax and other seemingly scattered taxes also contribute about 10%, while VAT only accounts for 30 %insufficient. Why is there such an income pattern? Mainly in these regions. First, the industrial structure is mainly based on commercial approval, and income tax collection is handy. Second, high-value-added processing industries are common, and the processing industry has a higher tax burden than the coal coke industry in Jinzhong City. Obviously low, low value-added tax burden, so that companies have more profit space, and then converted to income in the form of income tax, to achieve an effective conversion between the industrial structure and tax structure. Due to the severe industrial structure of Jinzhong City, the situation of income is overwhelming, but the circulation industry, which has made outstanding contributions to local available financial resources and regular income, has not made a qualitative breakthrough, and it has shown a shrinking trend of annual proportion. Therefore, it is urgent to reverse the imbalance of the industrial structure and the distortion of the product structure in Jinzhong as soon as possible, and accelerate the transfer of the production area to the circulation area.

Make full use of the opportunity of the provincial-to-city financial system reform to expand the size of the county's regular income. In 2007, the province issued the "Notice of the People's Government of Shanxi Province on Adjusting and Regulating the Financial System of Provinces, Cities, and Counties, and Implementing the" Provincial Directly Managed Counties "Financial Reform Pilot in 35 Key Poverty Reduction and Development Counties." Local taxes on the five types of income tax, corporate income tax, business tax, and resource tax (five taxes) The share ratio is: 30% at the provincial level (original 35%), 15% at the city level, and 55% (original 50%) at the county level. In addition, urban land use tax and cultivated land occupation tax are all decentralized to county-level income. According to the new fiscal system of provinces, cities and counties, the county level will be able to obtain more proportions and financial resources from changes in income sharing. Therefore, 2007 will be a system and a watershed in county-level recurrent income, and the county-level five taxes will achieve an increase of at least 5%. In particular, the county-level share of business tax and resource tax increased by 5 percentage points, and the two income taxes increased by 2 percentage points, which brought great institutional opportunities for the adjustment of the county's industrial structure. In addition, the urban land use tax and cultivated land occupation tax were all decentralized. , Marking a small tax collection will have a large article to do.

In the process of county-level recurring income construction, it is necessary to start from solving the stability of the financial resources structure. At present, all counties have shown signs of finding new ways in the cultivation of financial resources. However, from the perspective of the increase and scale of recurrent income, the change in the growth of recurrent income determines the trend of the distribution of financial resources. There is great instability in the structure of financial resources. Some counties with low actual financial resources and low per capita possessions do not enjoy or can only enjoy very few transfer payments. The lack of income efforts is an important aspect. In the organization of regular income in the future, counties should make economic development and financial growth closer. At the same time, they should also consider promoting the reasonable allocation of resources to ensure the ultimate realization of the goal of industrial structure adjustment.