Dalian Local Taxation Bureau (DLTB)

Duties and Functions

Dalian Local Taxation Bureau (DLTB) was established on December 28, 1994. There are 2196 staffs in the bureau, of which 98% have received education above college level. The bureau has six leaders, including a Party Secretary, a Party Member and Director-General (concurrent), three Party Members and Deputy Director-Generals (concurrent) and, a Party Member and Disciplinary Inspector (concurrent). Additionally, the bureau has two Supervising Officers, two Deputy Supervising Officers and a Chief Economist. The bureau consists of eighteen divisions, five institutional organizations and eighteen basic level bureaus.

DLTB is a functioning department of Dalian Municipal Government. It receives direct administration from Dalian Municipality instead of Liaoning Provincial Local Taxation Bureau. It has not yet been charged with collection of social insurance fund. DLTB is responsible for the collection of following tax categories: business sales tax, corporate income tax, individual income tax, resource tax, urban and township land use tax, city maintenance and construction tax, stamp tax, house tax (urban real estate tax), vehicle and vessel usage tax (vehicle and vessel usage license plate tax), educational surcharge, local educational supplement, land appreciation, farmland occupation tax, and deed tax.

DTLB is responsible for a total of 300,597 taxpayers. Among them, 107,955 are corporate taxpayers, accounting for 35.91%; 192,642 are self-employed taxpayers, accounting for 64.09% (there are 34,409 who have not reached the collection point, accounting for 17.86%).
In 2007, 34 taxpayers respectively turned in tax above RMB 50 million yuan, totaled 4.6 billion; 284 taxpayers turned in tax between 10 and 50 million yuan, totaled 5.675 billion; 336 taxpayers turned in tax between 5 million to 10 million, totaled 2.345 billion; 1,872 taxpayers turned in tax between 1 million to 5 million totaled 4.177 billion; 1,555 taxpayers turned in tax between 500,000 to 1 million, totaled 1.114 billion; 6,492 taxpayers turned in tax between 100,000 to 500,000, totaled 1.482 billion; 4,518 taxpayers turned in tax between 50,000 and 10,000, totaled 322 million; 14,837 taxpayers turned in 10,000 to 50,000,totaled 350 million; 168,466 taxpayers turned in below 10,000, totaled 139 million. The rest 102,203 paid no tax (including 34,409 below the collection point).

Since the founding of the bureau, under the instruction of the State Taxation Bureau and the Provincial Local Tax Bureau, under the leadership of the Dalian Party Committee and the Municipal Government, and together with assistance of district level government authorities and related department, especially, through the support of the taxpayers in the city, DLTB has made magnificent achievements in local taxation collection. The mission of DLTB is to gather wealth for the nation, and manage tax for the people. The people of DLTB are unite, professional, diligent and innovative.

Major Achievements

1. Tax revenue continuously hit record. The leverage role was given a full play.

DLTB has taken serving the social and economic development as its responsibility and organized collection vigorously.  Tax revenue grew at average 19% based on the 1995 revenue, RMB 2.698 billion yuan. In 2004, it first exceeded 1 billion. In 2007, it hit a record of 2.079 billion, 7.7 times of that in 1995. Annual increase was 5.96 billion, bigger than the revenue of year2000 (5.61 billion). In the first four months of 2008, tax revenue reached 9.679 billion, increasing 2.245 billion than same period of 2007, up 30.2%. From 1995 to 2007, an accumulative total of 107.335 billion RMB yuan of local tax revenue had been realized, of which 94.694 billion were put in local fiscal usage. Local taxation has grown harmoniously with economy and has provided strong guarantee for the social and economic development of Dalian.
Meanwhile, preferential tax policies were granted to support reform and development activities, including: revitalization of the northeast industrial base, construction of the northeast international shipping center, the Four Bases, the Two Areas and One Belt, and new rural area development. Local tax was also utilized to support plans such as the relocation of SOEs, high-tech industry growth, port economy, tertiary industry, private economy and SMB growth, upgrading and optimization of industry sector structure, encouraging independent innovation, production scaling through re-investment, resource utilization, energy saving and pollution release reduction.

Local tax was also used to solve settlement of laid off workers, social public welfare undertaking work, supporting new enterprises or enterprises run on welfare basis, school basis, help disadvantaged groups, helping business which were stricken by natural disasters to recover production, encouraging self employment among civilian soldiers and officers, college graduates and laid off workers.  

During 2001 and 2007, a total of RMB 5.8 billion of tax was removed or reduced for companies and self employed individuals. This gained complement from the city leaders. DLTB has strengthened study and research on taxation policies, gathering feedback and demand on policies from various aspects and proactively getting policy support to create space for fast economic development and social harmony.

During the SARS period in 2003, DLTB led the province to put forward nine policies to remove, reduce and defer taxes for enterprises. Also, it led the province in collecting the agricultural special product tax at the agricultural tax standard, the burden of farmers dropped from 135 yuan to 73 yuan per capital. In 2004, agricultural tax was exempted in advance and special product tax was cancelled, which reduced a total of 120 million of burden for farmers of the city. In July 2003, individual income tax level was raised to 1,200 from 900 yuan, disposable income of residents rose. In September 2003, taxi quota was lowered and each car enjoyed RMB 63 yuan of tax reduction.

Targeting the situation of high tax for insurance sales (non-employee), DLTB adjusted the deduction base for them to encourage insurance business. The deduction standard of insurance sales professionals is the highest in nation. For introduced talents qualified for the municipal government regulation, their subsidies and allowance given by public finance, a policy of temporary tax exemption was carried out. DLTB also adjusted the starting collection point for self employed individuals, and standard for general housing and high class housing. All these policies have promoted and stimulated economy and social construction.

2. Advancing management structure and consolidating local administration.

In September 1995, at the request of the State Taxation Bureau of reforming tax collection system, DLTB implemented experimental basic level bureaus. Since January 1997, DLTB carried the new model in the whole city’s local taxation system which are “Oriented at tax declaration and quality of service, based upon computer system; centralized collection and focused inspection and audit”. In auditing work, four procedures are separated: “Selection, Inspection, Auditing and Execution.”

In December 2001, vertical management was carried throughout district and county level bureaus under the local principle and principle of “Concise, Effective, Standard and Unified”. Tax was “registered centrally, managed locally, collected centrally, audited by degree, recruited by category”. Registration, collection and auditing were separated. The old situation of mixed structures, “each does his own way” operation and distorting tax leverage role disappeared. Tax staffs and officers no longer get involved in competing for tax sources.

In November 2003, under the principle of “local collection and revenue sharing”, DLTB identified city and district (two) level revenue allocation measure and adjusted 4,045 crossed managed entities. First -line office management scope and local geographic scope match with each other. Administrator is responsible for his own area and accounts. Boundary of collection became distinct. The issue of competing for sources and account was solved; the phenomenon of return to finance and fake increase of collection was controlled. The municipal government’s macro control and transfer payment power has strengthened. This reform laid a solid foundation for the city’s tax basis. The tax numbers are true except those of Wa Fangdian City, Pu Liandian City, and Zhuanghe City.

In May 2007, Liaoning Provincial Local Tax Bureau has authorized DLTB to manage its Dalian branch. The Direct Affiliated Bureau was established to take charge of companies affiliated to the provincial government and also 15 companies identified by the municipal government. As the municipal government cancelled the “locked account” in the High-Tech Park Bureau and Gang Jingzi District Hongqi Town, DLTB adjusted last 15 accounts which were cross managed, thus thoroughly implemented local area administration. Power of tax is concentrated, and administration of tax is unified. Disorder of tax collection has ended.

1. Deepening tax collection and administration reform, improving the management standard

After the reform of tax collection structure, DLTB has kept deepening the reform process and building the standard information management system. DLTB surveyed tax sources deeply and thoroughly in the city, including using GPS technology to survey sources for land usage tax in the urban and rural area to identify and confirm taxable land area. This was highly spoken of by Chief Director of State Tax Administration, Xie Xuren, and was recommended for promotion in the whole nation. Through various measures, basic information and tax source pool has been collected and well laid. Management over tax accounts has been reinforced. Mistakes in collection and administration are solved from the sources.

DLTB has divided the city’s taxpayers into six categories: Key account, general account, confirmed collection account, market collection account, entrusted collection account, and agricultural account. Key accounts (yearly tax payment over 300,000 in the four city proper districts and in the open zones; 50,000 in other districts and counties) and individuals with higher income are monitored at a dynamic base.  Tax evaluation system has been built to evaluate collection management work.
Management of real estate tax has also been systemized and regulated. Based on straight collection of deed tax, DLTB built a model of “project based, tax source controlled, collaboration between departments, standard operation, and combination of inspection and administration”. Tax administration moves to tax category management. Corporate income tax record declaration and before-tax item electronic approval has been carried out. Self-declaration of individual income tax (with income over 120,000) and declaration of all individuals and full amount has been carried out too, as well as the pre-paid land appreciation tax and withheld vehicle and ship tax. DLTB also reformed the cargo vehicle’s withholding tax collection method, enabling flat management and standard management of companies authorized to issue invoice independently. In various tax categories reform, DLTB’s work has been acknowledged by the State Tax Administration.

Scheduling conference system has been set up to moderate tax collection. DLTB claimed back the power of administration over invoices and integrate invoice and tax management. Withholding collection measures have been improved. In the four Inspection and Auditing Bureaus, rotate inspection is adopted and “comparison-based”, “cross-based” inspections have been conducted. Feedback system of auditing work was established thus facilitated internal management. Through consolidating tax administrator responsibility system, DLTB enhanced collection to a standard, lean and scientific level. DLTB’s many tax quality indexes rank first in the national taxation system.

1. Legal construction has achieved progress and taxation environment improves gradually

 Since the founding of DLTB, it has taken taxing by law as a key part of ruling the country by law. In 1996, the Tax Administrative Review Commission was set up. In 1998, tax law enforcement responsibility system was established. In 2001, a comprehensive regulation system was set up based on the goal of “Regulating administration behaviors, strengthening responsibility settlement, enhancing efficiency, improving services, searching for scientific growth and promoting a harmonious society”.

In 2004, the Working Implementation Measure on Taxing by Law was formulated, raising requirement for leadership, documents, behaviors involved with taxation and law enforcement monitoring and infrastructure. Opinions of Implementation has been issued as well clearly stating the main body of enforcement, the power and limits of enforcement, evidence and procedure of enforcement. Reform was conducted in approval system: 43 items were cancelled with only 3 left. Online approval management of tax reduction and exemption was adopted. 108 regulative documents which were not in line with the taxation laws and rules were demolished. The process of drafting regulative documents in local tax bureaus and each level of government was governed.

DLTB set up the Enforcement Committee as decision making group to discuss big tax issues, especially related to tax exemption and reduction approval. Four thorough examination activities were carried out to correct existing problems and keep power within limits. Representatives from the People’s congress and the Political Consultative Conference were invited as special inspector. The city’s taxation has a much better order, especially in the sector of real estate, construction engineering, finance and insurance, chain business, labor service third party, catering and sauna services, ocial funded and private education, medical equipment and medicine production and supply chain, cargo transportation, entertainment, individual account and government and its affiliated units.

Since DLTB’s establishment, 106,449 taxpayers were inspected and a total of RMB 3.337 billion yuan tax was remedied. A number of tax cases were executed. From 2005 to 2007, DLTB ranked top consecutively in the law enforcement evaluation organized by Dalian Municipal Government. DLTB wa awarded for two consecutive years as Pioneering Unit of the National Taxation System. Leaders of the State Council Legal Affairs Office, State Taxation Administration, Liaoning Provincial Tax Bureau, Dalian People’s Congress and Political Consultative Conference have come to DLTB many times to inspect our work and have all given high comments to DLTB. State Taxation Administration leaders have instructed the national tax system to promote DLTB’s successful experience.

5. Advancing tax service system and getting positive feedback from the taxpayers
DLTB pays big attention to tax services. After the new collection measure was published, DLTB has issued opinions to strengthen tax services in time in the whole city to guide tax services. It led the nation to build a specialized service organization and integrate the service system. It built respectively the website, 12366 tax hot-lines and the service hall building. Through comprehensive system led by the bureau chiefs, driven by the tax service division, and supported by relevant departments, followed by basic unit bureaus, tax services for taxpayers have been enhanced greatly.

One Window, One Stop service has been provided at the service hall. Laid workers can enjoy green pass for reemployment. Through the local tax website and 12366 hot lines, taxpayers can process every work easily without visiting the actual tax office. During 2004 and 2007, DLTB’s website continuously won the best 10 official sites in Dalian City. In 2007, it ranked the 4th in 68 provincial level tax websites. In 2008, among 71 provincial websites, it ranked the 2nd.

Service branded as “Zero Space and Full Satisfaction” was carried out to protect the interests of taxpayers. Many measures are adopted, such as opening the Director’s Reception Day, inviting special inspectors, publishing telephone numbers for complains, sending out survey and letters, convening taxpayer seminars, visiting taxpayers, setting supervision letter box in the service hall etc. Diversified channels are available for taxpayers to communicate with DLTB. DLTB is also able to understand the needs of taxpayers and improve its work. Satisfaction rate of taxpayers reached 97%.

In 2005, DLTB received the tax service evaluation from UNDP on behalf of the state taxation system. State Taxation Administration and international experts spoke highly of DLTB’s performance. Since 1998, DLTB has been awarded with Model Organization of Spiritual Construction in Liaoning Province for three times. From 2005 to 2007, DLTB won the title of Model Unit of Soft Environment Construction of Dalian for three consecutive years. The brand of “Zero Space and Full Satisfaction” was also graded by Dalian Direct Government Organization Party Commission as the best service brand of the year.

1. Keep Innovating and enhance administrative efficiency

In recent years, in order to meet the goal of Dalian to revitalize its economy, to build international modern city, to increase the city’s competitiveness, and to develop fast and sound, DLTB has focused on enhancing administrative efficiency and taken a great deal of innovative measures such as follows:

Processing tax registration and evaluate taxpayer credit level together with the Municipal State Tax bureau; conducting foreign company annual examination jointly with the Industrial Bureau and other 6
departments; entrusting toll fee collection department to collect vehicle tax and adopt the “tax and fee bundled charge”, “One Procedure of Payment in Same City” so that taxpayers can handle all tax issues in any station (office) in the city; entrusting relevant departments to collect some market tax, rental house tax etc so that taxpayers can pay tax nearby. Over 600 forms were simplified and 80 forms merged to 40. Over 170 business processes were reengineered, total time of processing was reduced by 70%. Online tax declaration is encouraged and 76892 taxpayers (accounting for 89.55% of the total revenue) have used internet to report tax, greatly improving efficiency.

In March 2006, as the nation promoted application of tax ECR (electronic cash register), DLTB launched the Golden Tax Project (Third Phase) in Dalian, restructured business process of tax registration, declaration, information collection, invoice management, tax evaluation, tax source monitoring, tax inspection, tax analysis, planning and statistics, tax category management etc. This project had carried experiment in two basic bureaus and 3 basic units. On May 8th 2008, it went live in the whole tax system. Tax collection and administration made a big leap.

In April 2007, DLTB also introduced ISO9000 quality system as an experiment in the municipal government. Scores assessed through the quality certification ranked top in 10 experiment departments. Regulations and quality guidelines, responsibilities and procedures were made based on ISO9000 system. Currently, DLTB is building supporting regulations and systems to better serve the the Golden Tax Project (Third Phase) and prepare for long term, continuous improvement in standard, procedural and information and automation based operation. In April 2008, DLTB was awarded the title of Model Organization of Work Ethics and Administrative Efficiency in the city.

7. Building a sound prevention and punishment system for a clean government
Since DLTB’s founding, it has always placed construction of clean government and clean party as a target. Comprehensive governance and prevention guidelines have been made. In the system of prevention and punishment, various mechanisms including responsibility, education, regulation guarantee, supervision, punishment and evaluation have been established.

In actual operation, three key aspects were strengthened: division of responsibilities, evaluation of responsibilities and investigation of fault and responsibilities. DLTB educates its officers and help them from being corrupted. To monitor the behavior of top leaders, a series of regulations have been made. Top leader do not manage personnel and finance work directly. Sensitive positions and key places liable to problems in tax enforcement and administrative powers are monitored. Leaders must follow democratic centralism and fulfill individual report, prepare for work conduct summary, democratic review, leader’s economic responsibility audit and self discipline. Wrong conduct behavior and issues reflected by the people will be seriously investigated and corrected. Liaoning People’s Net platform has been opened and incorporated into the provincial system for correction of wrong conduct. Channels for complain, suit letter and phone calls on a regular basis have been set up. 314 representatives are invited as social volunteer supervisor. “One case under two investigation” method was created, regulating tax officers’ behavior and administration. Misconduct in law enforcement gets more serious punishment. It is DLTB’s determination to punish and suppress corruptions.

Meanwhile, DLTB strengthened education in cultural construction and building a healthy atmosphere for honoring the clean and shaming on the greedy. Most officials have enhanced their minds and the trend is growing better and better. In 2004, DLTB ranked 2nd in the provincial democratic test and evaluation of business conduct in the law enforcement sector and taxation sector. In the city wide review, DLTB ranked 1st among 35 law enforcement units. In 2005 and 2006, DLTB ranked 1st again in the whole city’s administrative conduct contest in law enforcement sector. In 2007, it ranked 1st among all government units.

8. Optimizing the management team and enhancing quality of officials
DLTB has always taken the high quality management team as a target, such as innovating the organization system, strengthening team building under the goal of “Five Quality Teams”, strengthening political theory study and, helping leaders better understand market economy and judge the future trends on a scientific basis. DLTB organized CPC party member continuous improvement education, the party construction gets further strengthened.

DLTB also accelerated reform in personnel system and adopted competition selection. There have been 26 division level officials, 75 deputy divisional officials, 147 section level officers and 232 deputy section level officers appointed through selection, which accounted for 54.82% of the total management team. The age structure and education structure has been optimized. Also, 113 divisional level officers and 174 section level officers rotated on their positions or went to basic units for exercises. The preparation and training for back up leaders was strengthened. DLTB conducted comprehensive training to the staffs under the guideline of “Focus on quality, capability, method of training and continuous learning”. Training is provided according to different needs of organizations, positions and individuals. DLTB organized two qualification examinations for all members in the system. Work quality and staff quality has been improved dramatically.     

Since 2004, DLTB has won group championship for three times and silver medal one time during the provincial contest of tax audit business, tax collection, tax law and regulation and statistics work. DLTB also sent 6 staffs to study in well known international universities and 33 staffs to domestic universities on economics, public management and software engineering major. DLTB paid attention to the cultural life of the staffs and organized various programs to improve their extra curriculum activities. Targeting the phenomenon of “no difference in working or not working, and no difference in working hard and well or not”, DLTB has taken measures to solve the problem. Since 2002, DLTB has started to promote tax culture and established the concept of “Loyal to our country, loyal to the law, loyal to the taxpayers”.
The mindset, moral standard, policy conscience, working capability and cultural level of the tax staffs have greatly lifted. The past practice has proved that DLTB has a strong leadership and a powerful execution team.

Over the years, DLTB’s achievements were fully recognized by upper level tax administration, the municipal party committee, people’s congress, government, and political consultative conference and disciplinary commission. Also, the society, including the taxpayers, gave a lot of complements to the bureau. We understand and appreciate the supports, but we clearly know that there is a still a long way to go.

2008 is the new government term year. To ensure that the goals set by the new term of government can be realized, DLTB has set up the working guideline for future five years and outlined 12 fundamental goals:
1. Organizing collection work and maintain the harmonious growth for taxation and economy;
2. Giving full play to tax leverage role and facilitate social and economic development;
3. Regulating tax collection operation and keeping social fairness and justice;
4. Deepening scientific and detailed management in tax categories;
5. Providing new tax service solutions and building a better collection and payment relationship;
6. Deepening reform in management and building a system with well defined power and responsibility, clear division of work, scientific decision making process and effective monitoring mechanism;
7. Consolidating construction of regulations and guarantee smooth operation under a standard system;
8. Improving efficiency and enhancing the quality and efficiency of tax collection;
9. Deepening reform in personnel system and building a high quality team satisfying both the leaders and the tax payers;
10. Strengthening the construction of party and work unions, strengthening political thoughts and culture in the local tax system, increasing sense of affinity;
11. Strengthening clean government and clean party conduct education and construction;
12. Strengthening study and research in theories and academic exploration, leveraging the results in actual work.    

At present, DLTB is still facing some challenges, such as the large base of tax revenue, high quota of growth, pressure of tax collection implementation, and clearance of undue tax payment. The legal environment needs further improvement. The risk prevention in taxation enforcement needs to be pushed. Level of tax collection and service needs enhancement. Also, DLTB shall make continuous efforts in building clean government and party, and improving the quality of its staffs. We will continue to solve those problems and emancipate our minds. We will pursue scientific growth and accomplish the tasks laid ahead of us, making more contribution to the country and society. We will not let down our colleagues and our taxpayers.