Broke Local Govts Derail Central Govt Tax Cuts With Fee Hikes

Public revenue primarily from taxes, but under pressure of the economic downturn, some of the local fiscal revenue in non-tax revenue has increased significantly, 'enough taxes and fees to Minato' phenomenon worthy of attention." Ministry of Finance Branch, deputy director dynasty was told reporters.

...Taking Shanxi Province as an example, in 2011, the province's tax revenue accounted for 71.9% of public revenue. In 2014, it fell to to 62.3%, non-tax revenue share increased by 9.6 percentage points.

It's even worse at the local level:

Xifeng County, Guizhou Province, in 2014 non-tax revenue accounted for 19%, while non-tax revenues accounted 32.2% of revenues in the first half of 2015; Huishui county in Guizhou saw 2014 non-tax revenue accounting for up to 46.2% of total revenues, almost on an equal footing with taxes, each half. In the first half of last year, the situation has improved, the proportion of non-tax fell to 37.4%, but still very high.

Fees are also a breeding ground for corruption.

There are some in the intermediary service institutions and government departments related interest, monopoly, increased the burden on businesses, disrupted the market order, and even become the breeding ground for corruption. "A lot of review and assessment, not simply looking for an intermediary pass, just give the money to the agency, all the problems will no longer be a problem." Many companies said that such a situation had encountered in their operations.

The government has a solution to the corruption problem, but not the lack of revenue due to the slowdown in land sales and overall economic activity.
iFeng: 地方财政乱象：税不够费来凑 减税有用吗？