Budget Law of the People's Republic of China (2018 Amendment)

Budget Law of the People's Republic of China (2018 Amendment) Budget Law of the People's Republic of China (Adopted at the 2nd session of the Eighth National People's Congress on March 22, 1994, and amended for the first time according to the Decision on Amending the Budget Law of the People's Republic of China adopted at the 10th session of the Standing Committee of the Twelfth National People's Congress of the People's Republic of China on August 31, 2014, and amended for the second time in accordance with the Decision of the Standing Committee of the National People's Congress to Amend Five Laws Including the Product Quality Law of the People's Republic of China adopted at the 7th session of the Standing Committee of the thirteenth National People's Congress on December 29, 2018) Table of Contents Chapter I General Provisions Chapter II Budget Management Functions Chapter III Scope of Budgetary Revenues and Expenditure Chapter IV Budget Preparation Chapter V Review and Approval of Budgets Chapter VI Budget Implementation Chapter VII Budget Adjustment Chapter VIII Final Accounts Chapter IX Supervision Chapter X Legal Liability Chapter XI Supplementary Provisions Chapter I General Provisions Article 1 To regulate government revenues and expenditure, reinforce budget control, strengthen budget management and supervision, establish and improve a comprehensive, standard, open, and transparent budget system, and ensure the sound development of economy and society, this Law is developed in accordance with the Constitution . Article 2 This Law shall apply to the preparation, review, approval, and supervision of budgets and final accounts and the implementation and adjustment of budgets. Article 3 The state shall establish one budget level at each of the five levels of government: Central Government; provinces, autonomous regions, and municipalities directly under the Central Government; cities divided into districts and autonomous prefectures; counties, autonomous counties, cities not divided into districts, and districts of a city; townships, ethnic townships, and towns. The national budget consists of the central budget and the local budget. The local budget consists of the general budgets of all provinces, autonomous regions, and municipalities directly under the Central Government. “A general budget at any local level consists of a budget at the local level and the sum of general budgets at the next lower level. If there are only budgets at the local level at the next lower level, the sum of general budgets at the next lower level means the budgets at the local level at the next lower level. If there is no budget at the next lower level, a general budget means a budget at the local level. Article 4 A budget consists of budgetary revenues and budgetary expenditure. All government revenues and expenditure shall be included in a budget. Article 5 Budgets include general public budgets, government fund budgets, state-owned capital operating budgets, and social insurance fund budgets. General public budgets, government fund budgets, state-owned capital operating budgets, and social insurance fund budgets shall remain complete and independent. Government fund budgets, state-owned capital operating budgets, and social insurance fund budgets shall be connected with general public budgets. Article 6 A general public budget is a revenue and expenditure budget that arranges the use of revenues primarily from taxes for safeguarding and improving people's livelihood, promoting economic and social development, protecting national security, and maintaining the normal functioning of the state machine, among others. The general public budget at the central level includes the budgets of all departments of the Central Government (including entities directly under them, here and below) and the budgets of tax refunds and transfer payments from the Central Government to the local governments. The revenues in the general public budget at the central level include the revenues obtained at the central level and the revenues transferred from the local governments to the Central Government. The expenditure in the general public budget at the central level includes the expenditure at the central level and the tax refunds and transfer payments from the Central Government to the local governments. Article 7 The general public budget of a local government at any level includes the budgets of all departments at the level (including entities directly under them, here and below) and the budgets of tax refunds and transfer payments. The revenues in the general public budget of a local government at any level include the revenues obtained at the local level, the tax refunds and transfer payments from the governments at higher levels to the government at the level, and the revenues transferred from the governments at lower levels. The expenditure in the general public budget of a local government at any level includes the expenditure at the local level, the revenues transferred to the governments at higher levels, and the tax refunds and transfer payments to the governments at lower levels. Article 8 A departmental budget consists of the budget of the department and the budgets of all entities under it. Article 9 A government fund budget is a revenue and expenditure budget that uses the funds collected, charged, or otherwise raised from specific targets in accordance with laws and administrative regulations exclusively for the development of certain public undertakings. A government fund budget shall be prepared by fund items according to the revenues and actually needed expenditure of fund items under the principle of determining expenditure based on revenues. Article 10 A state-owned capital operating budget is a revenue and expenditure budget that arranges the expenditure of state-owned capital gains. A state-owned capital operating budget shall be prepared under the principle of balancing revenues and expenditure, include no deficit, and allocate funds to the general public budget. Article 11 A social insurance fund budget is a revenue and expenditure budget that uses the funds paid for social insurance, arranged in the general public budget, or otherwise raised exclusively for social insurance. A social insurance fund budget shall be prepared by levels of overall planning and social insurance items respectively under the principle of balancing revenues and expenditure. Article 12 Budgets at all levels shall adhere to the principle of “overall and comprehensive arrangements, thrift and economy, consistence with capabilities, emphasis on performance, and balance between revenues and expenditure. The governments at all levels shall establish a balancing mechanism for budgets to be carried over to the next year. Article 13 A budget approved by a people's congress shall not be adjusted without undergoing the statutory procedures. The expenditure of governments at all levels, all departments, and all entities must be based on the approved budgets, and any expenditure not listed in a budget shall be prohibited. Article 14 Any budget, budget adjustment, final accounts, or budget implementation report or statement approved by a people's congress or the standing committee thereof shall be published by the financial department of the government at the same level within 20 days after approval, along with explanations on the government's financial transfer payment arrangements, the implementation thereof, any debts borrowed, and other important matters. The departmental budgets, final accounts, and statements approved by the financial department of the government at the same level in the form of an official reply shall be published by the relevant departments within 20 days after approval, along with explanations on the allocation and use of the operating costs in departmental budgets and final accounts and other important matters. The governments at all levels, all departments, and all entities shall disclose government procurement information to the public in a timely manner. Matters to be published under the preceding three paragraphs shall not be published if they involve any state secrets. Article 15 The state shall apply a tax-sharing system to the Central and local governments. Article 16 The state shall apply a financial transfer payment system. Financial transfer payments shall be made in a compliant, fair, and open manner and primarily aimed at promoting the equality of basic public services among regions. Financial transfer payments include the transfer payments made by the Central Government to the local governments and the transfer payments made by the local governments at higher levels to the local governments at lower levels, and primarily include the general-purpose transfer payments for balancing the basic financial strengths of regions as used according to the overall plans of the governments at lower levels. Special-purpose transfer payments may be established in accordance with laws, administrative regulations, and the provisions of the State Council to handle specific matters. The periodic evaluation and withdrawal mechanisms of special-purpose transfer payments shall be established and improved. Special-purpose transfer payments shall not be established for matters that may be effectively regulated by the market competition mechanism. When arranging special-purpose transfer payments, the governments at higher levels may not require the governments at lower levels to provide any supportive funds, except for matters that shall be jointly undertaken by the governments at higher and lower levels according to the relevant provisions of the State Council. Article 17 A mutual check and coordination mechanism shall be established and improved for the preparation and implementation of budgets at all levels. Article 18 A budgetary year shall begin on January 1 and end on December 31 in Gregorian calendar. Article 19 Budgetary revenues and expenditure shall be calculated in Renminbi yuan. Chapter II Budget Management Functions Article 20 The National People's Congress shall review the draft central and local budgets and the reports on the implementation of the central and local budgets, approve the central budget and the report on the implementation of the central budget, and change or revoke any improper resolutions of the Standing Committee of the National People's Congress on budgets and final accounts. The Standing Committee of the National People's Congress shall supervise the implementation of the central and local budgets, review and approve any adjustment proposals for the central budget, review and approve the final accounts of the Central Government, revoke any administrative regulations, decisions, or orders of the State Council on budgets or final accounts in conflict with the Constitution or any law, and revoke any local regulations or resolutions issued by the people's congresses or their standing committees of provinces, autonomous regions, or municipalities directly under the Central Government on budget or final accounts in conflict with the Constitution or any law or administrative regulation. Article 21 A local people's congress at or above the county level shall review the draft general budget at the same level and the report on the implementation of the general budget, approve the budget at the same level and the report on the implementation thereof, change or revoke any improper resolutions of its standing committee on budgets or final accounts, and revoke any improper decisions and orders issued by the government at the same level on budgets or final accounts. The standing committee of a local people's congress at or above the county level shall supervise the implementation of the general budget at the same level, review and approve any adjustment proposal for the budget at the same level, review and approve the final accounts at the same level, and revoke any improper decisions, orders, or resolutions of the government at the same level or the people's congress at the next lower level or the standing committee thereof on budgets or final accounts. The people's congress of a township, ethnic township, or town shall review and approve the budget at the same level and the report on the implementation of the budget at the same level, supervise the implementation of the budget at the same level, review and approve any adjustment proposal for the budget at the same level, review and approve the final accounts at the same level, and revoke any inappropriate decisions and orders made by the government at the same level on budget or final accounts. Article 22 The Financial and Economic Affairs Committee of the National People's Congress shall conduct preliminary review of the preliminary proposal of the draft central budget, the implementation of the budget for the prior year, the preliminary proposal of any adjustment of the central budget, and the draft central final accounts, and issue preliminary review opinions. The relevant specialized committee of the people's congress of a province, autonomous region, or municipality directly under the Central Government shall conduct preliminary review of the preliminary proposal of the draft budget at the same level, the implementation of the budget for the prior year, the preliminary proposal of any adjustment of the budget at the same level, and the draft final accounts at the same level, and issue preliminary review opinions. The relevant specialized committee of the people's congress of a districted city or autonomous prefecture shall conduct preliminary review of the preliminary proposal of the draft budget at the same level, the implementation of the budget for the prior year, the preliminary proposal of any adjustment of the budget at the same level, and the draft final accounts at the same level, and issue preliminary review opinions. In the absence of such a specialized committee, the opinions shall be issued by the relevant working body of the standing committee of the people's congress at the same level upon discussion. The standing committee of the people's congress of a county, autonomous county, city not divided into districts, or district of a city shall conduct preliminary review of the preliminary proposal of the draft budget at the same level and the implementation of the budget for the prior year, and issue preliminary review opinions. The relevant working body of the standing committee of the people's congress of a county, autonomous county, city not divided into districts, or district of a city shall issue opinions on the preliminary proposal of any adjustment of the budget at the same level and the draft final accounts at the same level. When the relevant specialized committee of the people's congress at or above the level of a districted city or autonomous prefecture conducts preliminary review or when the relevant working body of the standing committee thereof discusses and issues opinions, it shall invite deputies to the people's congress at the same level to participate in the process. For opinions issued under paragraphs 1 to 4 of this Article, the financial department of the government at the same level shall provide feedback in a timely manner. Reports on the opinions issued under paragraphs 1 to 4 of this Article and the feedback provided by the financial department of the government at the same level shall be distributed to the deputies to the people's congress at the same level. The relevant working body of the Standing Committee of the National People's Congress or the standing committee of the people's congress of a province, autonomous region, municipality directly under the Central Government, districted city, or autonomous prefecture shall, as decided by the standing committee of the people's congress at the same level, assist the financial and economic affairs committee or any other relevant specialized committee of the people's congress at the same level in undertaking the specific tasks in the review of draft budgets, budget adjustment proposals, and draft final accounts and the supervision of the implementation of budgets. Article 23 The State Council shall prepare the draft central budget and final accounts, make a report to the National People's Congress on the draft central and local budgets, submit the consolidated budgets submitted by the governments of provinces, autonomous regions and municipalities directly under the Central Government for recordation to the Standing Committee of the National People's Congress for recordation, organize the implementation of the central and local budgets, make decisions to use the central budget reserve funds, prepare any adjustment proposals for the central budget, supervise the implementation of the budgets of the departments of the Central Government and the budgets of the local governments, change or revoke any improper decisions and orders issued by the departments of the Central Government or by the local governments on budgets or final accounts, and make a report to the National People's Congress or its Standing Committee on the implementation of the central and local budgets. Article 24 A local government at or above the county level shall prepare the draft budget and final accounts at the same level, make a report on the draft general budget at the same level to the people's congress at the same level, submit the consolidated general budgets submitted by the governments at the next lower level for recordation to the standing committee of the people's congress at the same level for recordation, organize the implementation of the general budget at the same level, make decisions to use the budget reserve funds at the same level, prepare any adjustment proposals for the budget at the same level, supervise the implementation of budgets of the departments at the same level and budgets of the governments at the next lower level, change or revoke any improper decisions and orders issued by the departments at the same levels and the governments at the next lower level on budgets or final accounts, and make a report to the people's congress at the same level or its standing committee on the implementation of the general budget at the same level. The government of a township, ethnic township, or town shall prepare the draft budget and final accounts at the same level, make a report to the people's congress at the same level on the draft budget, organize the implementation of the budget at the same level, make decisions to use the budget reserve funds at the same level, prepare any adjustment proposals for the budget at the same level, and make a report to the people's congress at the same level on the implementation of the budget at the same level. With the approval of the government of a province, autonomous region, or municipality directly under the Central Government, the draft budget, any budget adjustment proposal, or the draft final accounts of a township, ethnic township, or town may be prepared by the government at the next higher level and submitted to the people's congress of the township, ethnic township, or town for review and approval in accordance with the provisions of Article 21 of this Law. Article 25 The financial department of the State Council shall prepare the specific draft central budget and final accounts, specifically organize the implementation of the central and local budgets, introduce proposals to use the central budget reserve funds, prepare the specific adjustment proposals for the central budget, and make regular reports to the State Council on the implementation of the central and local budgets. The financial department of a local government at any level shall prepare the specific draft budget and final accounts at the same level, specifically organize the implementation of the general budget at the same level, introduce proposals to use the budget reserve funds at the same level, prepare the specific adjustment proposals for the budget at the same level, and make regular reports to the government at the same level and the financial department of the government at the next higher level on the implementation of the general budget at the same level. Article 26 Each department shall prepare the draft budget and final accounts of the department, organize and supervise the implementation of its budget, and make regular reports to the financial department of the government at the same level on budget implementation. Each entity shall prepare the draft budget and final accounts of the entity, transfer upward budgetary revenues according to the provisions of the state, arrange budgetary expenditure, and receive supervision by the relevant departments of the state. Chapter III Scope of Budgetary Revenues and Expenditure Article 27 The revenues in a general public budge......