Regulation on the Implementation of the Budget Law of the People's Republic of China (2020 Revision)

Regulation on the Implementation of the Budget Law of the People's Republic of China (2020 Revision)

Order of the State Council of the People's Republic of China

(No. 729)

The revised Regulation on the Implementation of the Budget Law of the People's Republic of China is hereby issued and shall come into force on October 1, 2020.

Premier: Li Keqiang

August 3, 2020

Regulation on the Implementation of the Budget Law of the People's Republic of China

(Issued by Order No. 186 of the State Council of the People's Republic of China on November 22, 1995, and revised by Order No. 729 of the State Council of the People's Republic of China on August 3, 2020)

Chapter I General Provisions

Article 1 This Regulation is developed in accordance with the Budget Law of the People's Republic of China (hereinafter referred to as “Budget Law”).

Article 2 The local offices of the local governments at and above the county level shall conduct budget management activities as authorized by the governments at the same level, with their budgets at levels separated from those of the said governments, and their revenues and expenditure shall be included in the budgets at the local level.

Article 3 Social insurance fund budgets shall realize sustainable operation on the basis of actuarial balance, and general public budgets may, based on needs and financial strengths, appropriately allocate funds to supplement social insurance fund budgets.

Article 4 For the purpose of paragraph 6 of Article 6 of the Budget Law, “all departments” means the state organs, armed forces, political and Party organizations, public institutions, social organizations and other entities that have direct budgetary payment and appropriation relationship with the financial departments of the governments at the same level.

Article 5 A departmental budget shall reflect all budgetary funds allocated by general public budgets, government fund budgets and state-owned capital operating budgets to this department and all entities under it.

The budgetary revenues of a department include budgetary revenues from appropriations from the financial department at the same level to this department and all entities under it and other revenues. The budgetary expenditure of a department is the expenditure corresponding to the budgetary revenues of the department, including basic expenditure and project expenditure.

For the purpose of paragraph 2 of this article, “basic expenditure” means the expenditure incurred by a department or entity for guaranteeing its normal operation and completion of routine work tasks, including personnel expenses and public expenses; and “project expenditure” means the expenditure incurred by a department or entity for completing its specific work tasks and undertaking development objectives.

The budgetary revenues from appropriations from the financial department at the same level to a department or all entities under it and the corresponding expenditure shall be reflected separately in the departmental budget.

The specific measures for the preparation and implementation of departmental budgets shall be specified by the financial department of the government at the same level according to the law.

Article 6 The public disclosure of general-purpose transfer payments shall be detailed to regions. The public disclosure of special-purpose transfer payments shall be detailed to regions and items.

The information on government debts, operating costs of organs, government procurement, and funds in special-purpose financial accounts, among others, shall be disclosed to the public in accordance with relevant provisions.

In departmental budgets and final accounts, basic expenditure and project expenditure shall be disclosed to the public. The public disclosure of expenditure in departmental budgets and final accounts shall be specific to items based on the classification of their functions, and the public disclosure of basic expenditure shall be specific to funds based on the classification of their economic nature.

The budgets, final accounts, and statements of entities under a department shall be disclosed by the entities to the public within 20 days after approval by the department. In the budgets and final accounts of the entities, basic expenditure and project expenditure shall be disclosed to the public. The public disclosure of the expenditure in departmental budgets ad final accounts of the entities shall be specific to items based on the classification of their functions, and the public disclosure of basic expenditure shall be specific to funds based on the classification of their economic nature.

Article 7 For the purpose of Article 15 of the Budget Law, “system of tax sharing between the Central and local governments” means the financial management system in which the scope of fiscal expenditure of the Central and local governments is determined on the basis of the division of powers between the said governments, and the budgetary revenues of the Central and local governments are classified on the basis of tax types.

The specific content and implementation measures of the tax-sharing fiscal management system shall be governed by the relevant provisions issued by the State Council.

Article 8 A local government at or above the county level shall determine the fiscal management system of the government at the same level for the governments at lower levels according to the principle of the system of tax sharing between the Central and local governments and the relevant provisions issued by the governments at higher levels.

Article 9 For the purpose of subparagraph (2) of Article 16 of the Budget Law, “general-purpose transfer payments” includes:

(1) transfer payments for equalizing access to basic public services;

(2) financial subsidies for old revolutionary base areas, ethnic minority areas, border areas, and poverty-stricken areas; and

(3) other general-purpose transfer payments.

Article 10 For the purpose of subparagraph (3) of Article 16 of the Budget Law, “special-purpose transfer payments” means the budgetary funds allocated by the governments at higher levels to the local governments at lower levels for the purpose of specific economic and social development objectives and are arranged and used by the governments at lower levels according to the purposes specified by the people's governments at higher levels.

The financial departments of the governments at and above the county level shall, in conjunction with relevant departments, establish and improve the periodic assessment and withdrawal mechanisms for special-purpose transfer payments. The assessed special-purpose transfer payments shall be handled respectively according to the following circumstances:

(1) A special-purpose transfer payment which complies with laws, administrative regulations and the provisions issued by the State Council and is necessary to continue to be implemented may continue to be implemented.

(2) If the relevant requirements on the establishment of any special-purpose transfer payment change, or there is a relatively large gap between actual performance and objectives or the management is imperfect, the special-purpose transfer payment shall be adjusted.

(3) If the basis for the establishment of a special-purpose transfer payment is invalidated or abolished, the special-purpose transfer payment shall be cancelled.

Article 11 Budgetary revenues and expenditure shall be calculated in Renminbi yuan. Budgetary revenues and expenditure that are collected and paid in currencies other than RMB shall be converted into RMB.

Chapter II Scope of Budgetary Revenues and Expenditure

Article 12 For the purpose of paragraph 1 of Article 27 of the Budget Law, “revenues from administrative charges” means the revenues formed through the collection of charges by state organs and public institutions, among others, from specific objects according to the specified standards in the process of conducing social public management and providing specific public services to citizens, legal persons and other organizations in accordance with laws and regulations and upon approval under the procedures as prescribed by the State Council.

For the purpose of paragraph 1 of Article 27 of the Budget Law, “revenues from the compensated use of state-owned resources (or assets)” means the revenues from the compensated use of mineral deposits, waters, sea areas, uninhabited islands, and forests and grasslands owned by the state as provided for by the law and other state-owned resources, and the income from state-owned assets incorporated into the general public budget management as required, among others.

For the purpose of paragraph 1 of Article 27 of the Budget Law, “transfer income” means tax refunds and the transfer payments from the governments at higher levels, revenues transferred from the governments at lower levels, allocated funds, and grants from governments without a subordinate relationship which are included in transfer income as prescribed by the Ministry of Finance.

Article 13 Transfer expenditure includes the expenditure transferred to the governments at higher levels, the tax refunds and the transfer payments to the governments at lower levels, funds transferred out, and grants from governments without a subordinate relationship which are included in transfer expenditure as prescribed by the Ministry of Finance.

Article 14 The revenues in a government fund budget include revenues from various government fund items and transfer income.

The expenditure in a government fund budget includes the project expenditure and transfer payments corresponding to revenues in the government fund budget.

Article 15 Revenues in a state-owned capital operating budget include the profit revenues transferred as required to the state treasury by wholly state-owned enterprises and wholly state-owned companies, income from dividends and bonuses obtained from companies in which the state has a stake, whether controlling or non-controlling, revenues from the transfer of state-owned property rights, liquidation income and other income that shall be included in the state-owned capital operating budget n accordance with relevant laws and administrative regulations and the relevant provisions issued by the State Council.

The expenditure in a state-owned capital operating budget includes capital expenditure, expenses, funds transferred to general public budgets, and other transfer payments and other expenditure.

Article 16 The revenues in a social insurance fund budget include social insurance premium income, interest income, investment returns, subsidy income in the social insurance fund budget, collective subsidy income, transfer income, revenues from grants from the governments at higher levels, revenues transferred from the governments at lower levels and other revenues.

The expenditure in a social insurance fund budget includes expenditure on social insurance benefits, transfer expenditure, expenditure on subsidies to the governments at lower levels, expenditure transferred to the governments at higher levels, and other expenditure.

Article 17 The specific measures for the division of relevant revenue and expenditure items between the local budgets at higher and lower levels and for the transfer of revenues and expenditure to the governments at higher levels, refund or transfer payment shall be developed by the local governments at higher levels, and be filed with the standing committees of the people's congresses at the same level.

Article 18 The specific measures for the division of relevant revenue and expenditure items between the local social insurance fund budgets at higher and lower levels and for the transfer of revenues and expenditure to the governments at higher levels and subsidization shall be developed by the local governments at high levels by levels of overall planning, and be filed with the standing committees of the people's congresses at the same level.

Chapter III Budget Preparation

Article 19 For the purpose of Article 31 of the Budget Law, “draft budgets” means the budgets that are prepared by governments at all levels and all departments and entities and have not been subject to examination and approval under statutory procedures.

Article 20 For the purpose of paragraph 1 of Article 32 of the Budget Law, “performance evaluation” means the systematic and objective evaluation of the inputs, use process, outputs and effects of budgetary funds according to the pre-determined performance objectives and standard procedures.

The results of performance evaluation shall be used as the basis for improving management and preparing budgets for the subsequent years as required.

Article 21 For the purpose of paragraph 3 of Article 32 of the Budget Law, “budgetary expenditure standards” means the budget preparation standards for classifying in a reasonable manner and respectively providing for budgetary matters, including basic expenditure standards and project expenditure standards.

The financial departments of the local governments at all levels shall, according to the budgetary expenditure standards developed by the Ministry of Finance and in consideration of the level of economic and social development and financial strengths, among others, of local regions, develop the budgetary expenditure standards for their respective regions or at the local levels.

Article 22 The Ministry of Finance shall direct the specific matters on the preparation of draft budgets for the next year before June 15 of each year, and provide for statement formats, preparation methods, the periods for submission, among others.

Article 23 All departments of the Central Government shall organize the preparation of draft budgets of these departments and all entities under them in accordance with the requirements of the State Council and the arrangements made by the Ministry of Finance and in consideration of the specific circumstances of these departments.

All departments of the Central Government shall be responsible for the examination of the draft budgets of all entities under them, and prepare draft budgets of these departments on a consolidated basis, and report them to the Ministry of Finance for examination as required.

Article 24 The Ministry of Finance shall examine the draft budgets of all departments of the Central Government, and prepare the specific draft central budget; and consolidate the draft local budgets or budgets of local governments, and compile the draft central and local budgets.

Article 25 The governments of provinces, autonomous regions, and municipalities directly under the Central Government shall, in accordance with the requirements of the State Council and the arrangements made by the Ministry of Finance and in light of the specific circumstances of local regions, put forward the requirements for the preparation of draft budgets within their respective administrative regions.

The financial departments of the local governments at and above the county level shall direct the specific matters on the preparation of draft budgets for the next year within their respective administrative regions before June 30 of each year, and provide for statement formats, preparation methods, and the periods for submission, among others.

Article 26 All departments of the local governments at and above the county level shall, according to the requirements of the governments at the same level and the financial departments of the governments at the same level and in light of the specific circumstances of these departments, organize the preparation of the draft budgets of these departments and all entities under them, and submit them to the financial departments of the governments at the same level for examination as required.

Article 27 The financial departments of the local governments at and above the county level shall examine the draft budgets of all departments at the same level, prepare the specific draft budgets at the same level, compile the draft general budgets at the same level, and, upon review by the governments at the same level, submit them to the financial departments of the governments at the next higher level during the specified periods.

The draft general budgets at the same level or the general budgets at the same level consolidated by the financial departments of the governments of provinces, autonomous regions, and municipalities directly under the Central Government shall be submitted to the Ministry of Finance before January 10 of the next year.

Article 28 The financial department of a government at or above the county level shall, when examining the draft budget of a department at the same level, correct all noncompliance with the requirements of the draft budget it finds; and it shall, when compiling the draft general budget at the same level, report in a timely manner any noncompliance of the draft budget at a lower level with the budget preparation requirements of the government at a higher level or at the same level it finds to the government at the same level, and the government at the same level shall correct it.

Article 29 When preparing draft budgets for revenues, the financial departments of the governments at all levels shall request comments from taxation, customs and other departments and entities collecting budgetary revenues.

The departments and entities collecting budgetary revenues shall, according to the requirements of financial departments, provide the information on the forecasts of collection of budgetary revenues for the next year.

Article 30 Financial departments shall, in conjunction with the social insurance administrative departments, direct the specific matters on the preparation of draft social insurance fund budgets for the next year.

Social insurance agencies shall prepare the specific draft social insurance fund budgets for the next year, and submit them to the social insurance administrative departments at the same level for examination and consolidation. The specific draft budgets for revenues from social insurance funds shall be prepared by social insurance agencies in conjunction with institutions collecting social insurance premiums. Financial departments shall be responsible for reviewing and preparing after consolidation draft social insurance fund budgets.

Article 31 The financial departments of the governments at all levels shall, in accordance with the provisions of the Budget Law and this Regulation, develop procedures for the preparation of draft budgets at the same level.

Article 32 When preparing budget drafts, all departments and entities shall prepare relevant expenditure budgets according to the asset allocation standards and in consideration of their assets in place.

Article 33 The prepared content concerning the revenues in the general public budget at the central level includes the revenues in the general public budget at the same level, funds allocated from state-owned capital operating budgets, revenues transferred from the local governments, funds allocated from budget stabilization funds, and funds allocated from other sources.

The prepared content concerning the expenditure in the general public budget at the central level includes the expenditure in the general public budget at the same level, the tax refunds and the transfer payments to local governments, and supplemented budget stabilization funds.

The limits of the balance of central government debts shall be listed separately in the budget at the same level.

Article 34 The prepared content concerning the revenues in the general public budget of a local government at any level includes the revenues in......