Budget Law of the People's Republic of China (Revised in 2014)

Budget Law of the People's Republic of China (Revised in 2014)

Budget Law of the People's Republic of China (Revised in 2014)

Order of the President of the People's Republic of China No. 12

August 31, 2014

(Adopted at the Second Session of the Eighth National People's Congress on March 22, 1994, and revised according to Decision of the Standing Committee of the National People's Congress on Revising the Budget Law of the People's Republic of China adopted at the Tenth Session of the Standing Committee of the 12th National People's Congress of the People's Republic of China on August 31, 2014)

Contents
Chapter I General Provisions
Chapter II Functions and Powers for Budget Management
Chapter III Scope of Budgetary Revenues and Expenditures
Chapter IV Budget Compilation
Chapter V Examination and Approval of Budgets
Chapter VI Budget Implementation
Chapter VII Budget Adjustment
Chapter VIII Final Accounts
Chapter IX Supervision
Chapter X Legal Responsibility
Chapter XI Supplementary Provisions

Chapter I General Provisions

Article 1 The Budget Law of the People's Republic of China (hereinafter referred to as the "Law") is formulated in accordance with the Constitution with a view to regulating the government's revenue and expenditure, strengthening budget constraints, reinforcing budget management and supervision, establishing and improving a wholly standard, open and transparent budget system and safeguarding the healthy development of economy and society.

Article 2 Provisions of the Law apply to the preparation, review, approval and supervision of budget and final account, as well as the implementation of and adjustment to the budget.

Article 3 The State shall establish budget at each level of the government, namely, at the five levels: the Central Government; the provinces, autonomous regions and municipalities directly under the Central Government; the cities divided into districts and autonomous prefectures; the counties, autonomous counties, cities not divided into districts, and municipal districts; the townships, nationality townships and towns.
National budget consists of central budget and local budget. The local budget consists of the general budgets of the various provinces, autonomous regions and municipalities directly under the Central Government.
A local general budget at any level consists of the budget at the corresponding level and the totalized general budget at the next lower level. Where the next lower level has only the budget at the corresponding level, the general budget at the next lower level means the budget of the government at the corresponding level. In the absence of the budget at the next lower level, the general budget means the budget at the corresponding level.

Article 4 The budget consists of budgetary revenues and expenditures.
All the revenues and expenditures of the government shall be included in the budget.

Article 5 The budget includes general public budget, government-managed fund budget, state-owned capital management budget and social insurance fund budget.
The general public budget, government-managed fund budget, state-owned capital management budget and social insurance fund budget shall be maintained as complete and independent. The government fund budget, state-owned capital management budget and social insurance fund budget shall be linked with the general public budget.

Article 6 The general public budget refers to the budget for revenues and expenditures of the fiscal revenue mainly from tax collection that is arranged and used for ensuring and improving people's livelihood, promoting economic and social development, safeguarding national security, maintaining the normal functioning of national institutions and other aspects.
The general public budget of the Central Government consists of the budgets of all its government departments (including the units directly thereunder, hereinafter the same) and the budgets allocated for tax refunds and transfer payments to local governments.
Revenues of the general public budget of the Central Government consist of revenues at the level of the Central Government and revenues turned over by the local governments to the Central Government. Expenditures of the general public budget of the Central Government consist of expenditures at the level of the Central Government and the tax refunds and transfer payments by the Central Government to local governments.

Article 7 The general budgets of local governments at all levels consist of the budgets of all departments at their corresponding levels (including the units directly thereunder, hereinafter the same) and the budgets allocated for tax refunds and transfer payments.
Revenues of the general public budget of local governments at all levels consist of revenues of the governments at corresponding levels, revenues from tax refunds and transfer payments by governments at higher levels and revenues turned over by the governments at lower levels. Expenditures of the general public budget of local governments at any levels consist of expenditures of the government, expenditures caused by turning over tax revenues to governments at higher levels, and tax refunds and transfer payments to governments at lower levels.

Article 8 Budget of a department consists of the budgets of the department and the units subordinate to it.

Article 9 The government-managed fund budget refers to the budget for revenues and expenditures of the funds collected, received or otherwise raised from specific objects within a certain period as provided in laws and administrative regulations, specifically for development of certain public utilities.
The government-managed fund budget shall be prepared by fund item based on the revenue and actual spending needs of the fund items so as to realize the determination of expenditures by revenues.

Article 10 State-owned capital management budget refers to the budget for revenues and expenditures in connection with the expenditure arrangement for state-owned capital gains.
State-owned capital management budget shall be prepared according to the principle of maintaining a balance between revenues and expenditures, shall not contain deficit and shall arrange the transfer of funds to the general public budget.

Article 11 Social insurance fund budget refers to the budget for revenues and expenditures of social insurance contributions, general public budget and funds raised otherwise, for the special purpose of social insurance.
Social insurance fund budget shall be separately prepared by levels and items of social insurance to make ends meet.

Article 12 Budget at all levels shall follow the principles of making overall consideration, being diligent and thrifty, estimating the strength before acting, pursuing performance and maintaining a balance between revenues and expenditures.
Governments at all levels shall establish a cross-year budget balance mechanism.

Article 13 The budget approved by the people's congress shall not be altered without going through the procedures prescribed by law. Expenditures of governments at all levels and all departments and units must be based on the approved budget, and are forbidden if not listed into the budget.

Article 14 Reports and statements of budget, budget adjustments, final accounts and budget enforcement approved by the people's congress at corresponding level or the standing committee of the people's congress at corresponding level shall, within 20 days upon the approval, be released to the society by financial sector of government at corresponding level, along with the clarification about transfer payment arrangements, implementation thereof, debts and other important issues of the government at corresponding level.
The departmental budgets, final accounts and statements approved by financial sector of government at corresponding level shall, within 20 days upon the approval, be released to the society by each department, along with clarification about the arrangement and use of operational funds by organs in respect of the budgeting and final accounts and other important issues.
The governments at all levels and all departments and units shall timely release information about government procurement to the public.
Provisions on information disclosure in the above three paragraphs hereof shall not apply to cases involving state secrets.

Article 15 The State practises a system of tax division between the Central and local governments.

Article 16 The State adopts the fiscal transfer payment system. Fiscal transfer payment should be standardized, fair and open, and mainly target at promoting the equalization of inter-regional basic public services.
Fiscal transfer payment includes the Central Government's transfer payment to local governments and the transfer payments of local governments at higher levels to those at lower levels, and takes the general transfer payment wholly arranged and used by governments at lower levels for the purpose of maintaining the balance of regions' basic financial resources as the main part.
Special transfer payments can be set for handling special matters in accordance with laws, administrative regulations and provisions of the State Council. The regular assessment and exit mechanism of special transfer payments shall be established and improved. The special transfer payments shall not be set for matters that can be effectively regulated by market competition mechanism.
Governments at higher levels, when arranging special transfer payments, shall not request governments at lower levels to provide supporting funds, except for matters that shall be jointly undertaken by both governments at higher levels and governments at lower levels according to provisions of the State Council.

Article 17 A mutual restraint and coordination mechanism shall be established and perfected for the preparation and enforcement of budgets at all levels.

Article 18 A budgetary year begins on January 1 and ends on December 31 according to the Gregorian calendar.

Article 19 The budgetary revenues and expenditures take Renminbi yuan as the calculating unit.

Chapter II Functions and Powers for Budget Management

Article 20 The National People's Congress examines the central and local draft budgets and the reports on the implementation of the central and local budgets, approves the central budget and the report on the implementation of the central budget and alters or annuls inappropriate resolutions made by the Standing Committee of the National People's Congress on budget and final accounts.
The Standing Committee of the National People's Congress supervises the implementation of the central and local budgets, examines and approves the adjustment plan for the central budget, examines and approves the final accounts of the Central Government, annuls administrative rules and regulations, decisions, or orders of the State Council on budget or final accounts, which contravene the Constitution or laws, and annuls local regulations or resolutions made by the people's congresses or their standing committees of the provinces, autonomous regions or municipalities directly under the Central Government on budget or final accounts, which contravene the Constitution, laws or administrative rules and regulations.

Article 21 A local people's congress at or above the county level examines the draft general budget at the corresponding level and the report on the implementation of the general budget, approves the budget and the report on its implementation at the corresponding level, alters or annuls inappropriate resolutions made by the standing committee of the people's congress at the corresponding level on budget or final accounts and annuls inappropriate decisions and orders made by the government at the corresponding level on budget or final accounts.
The standing committee of a local people's congress at or above the county level supervises the implementation of the general budget at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines and approves the final accounts at the corresponding level, and annuls inappropriate decisions, orders and resolutions on budget or final accounts that are made by the government at the corresponding level or by the people's congress at the next lower level and its standing committee.
The people's congress of a township, nationality township or town examines and approves the budget at the corresponding level and the report on the implementation of the budget at the corresponding level, supervises the implementation of the budget at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines and approves the final accounts at the corresponding level, and annuls inappropriate decisions and orders on budget or final accounts that are made by the government at the corresponding level.

Article 22 The Financial and Economic Committee of the National People's Congress carries out preliminary review over the preliminary plan of draft budget of the Central Government and its implementation for the previous year, the preliminary plan of budget adjustments of the Central Government and draft final accounts of the Central Government, and then puts forward initial review comments.
The relevant special committees of people's congresses of provinces, autonomous regions and municipalities directly under the Central Government carry out preliminary review over the preliminary plan of draft budget at corresponding levels and the implementation for the previous year, the preliminary plan of budget adjustments at corresponding levels and draft final accounts at corresponding levels, and then put forward initial review comments.
The relevant special committees of people's congresses of cities divided into districts and autonomous prefectures carry out preliminary review over the preliminary plan of draft budget at corresponding levels and the implementation for the previous year, the preliminary plan of budget adjustments at corresponding levels and draft final accounts at corresponding levels, and then put forward initial review comments; where there is no special committee, the relevant working organs of standing committees of people's congresses at corresponding levels shall carry out studies and put forward comments.
The standing committees of people's congresses of counties, autonomous counties, cities not divided into districts and districts directly under the cities carry out preliminary review over the preliminary plan of draft budget at corresponding levels and the implementation for the previous year and then put forward initial review comments.
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