VII Fiscal Reform
  • 1 0000000404811396 Monetary Fund


When the central Government lost the authority to issue plan directives to enterprises as part of the 1968 economic reform, it resorted to a complex system of taxes and subsidies attached to factors of production, products, and incomes as a key instrument of economic policy. The primary tasks of the tax regime were to (i) secure revenues to finance government operations, a large part of investment, and sizable collective consumption expenditures; and (ii) redistribute current enterprise profits and retained earnings in pursuit of production, trade, income, and price policy objectives.

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