The Ministry of Finance ("MOF") has recently issued the Circular on Distributing in Advance the 2019 Transfer Payments Offered by the Central Government to Local Governments for the Refined Oil Prices and Taxes Reform (the "Circular").
The Circular states that, for the purposes of increasing the integrity of budgets and accelerating the pace of expenditures, the 2019 transfer payments offered for the refined oil prices and taxes reform are distributed in advance to all provinces, and may be allocated and used under relevant procedures from the start of 2019 fiscal year. This type of subsidy shall be itemized under the accounting title "1100215 Subsidy Income from Transfer Payments for the Refined Oil Prices and Taxes Reform", with the item code of Z135110079006. Meanwhile, the Circular requires that, each province shall, in accordance with the Measures for Transfer Payments Offered by the Central Government to Local Governments for the Refined Oil Prices and Taxes Reform, reasonably use funds of transfer payments and ensure higher efficiency in the use of such funds. According to the table of distribution affixed to the Circular, transfer payments distributed in advance for the year 2019 total CNY69.304 billion, among them, CNY1.067 billion to Beijing, CNY1.749 billion to Shanghai and CNY5.451 billion to Guangdong.