In addition, we have also allocated 347.232 billion yuan for national defense, an increase of 52.498 billion yuan or 17.8% over the amount for 2006. This increase will cover the cost of improving the army's ability to fight a defensive war under hi-tech conditions and respond to emergencies, safeguarding the country's sovereignty and territorial integrity, and appropriately increasing benefits for military personnel. A total of 23.066 billion yuan has been allocated for international exchanges and cooperation, an increase of 6.271 billion yuan or 37.3% over 2006. A total of 216.053 billion yuan has been allocated to cover expenses in providing regular public services to improve the performance of the central government and pay interest on treasury bonds, an increase of 6.795 billion yuan or 3.2% over the amount for 2006. Allocations will also be made from the central budget to meet other key expenses necessary to ensure the overall interests of reform, development and stability.

III. Performing Well to Ensure

Satisfactory Implementation of the 2007 Budgets

Taking all factors into consideration, we will need to focus on performing the following tasks well to meet the general requirements for the government's work in 2007 and ensure satisfactory implementation of the 2007 budgets.

1. We need to pay very close attention to the collection and management of tax revenue and non-tax revenue to promote steady growth in government revenue. We need to strengthen revenue collection and management in accordance with the law on the basis of strong support for economic development and growth in the size of the economic "pie." We need to work hard to rectify and standardize order in tax revenue, and aggressively combat all illegal acts such as tax evasion and tax fraud. We also need to strictly control tax exemptions and reductions and step up efforts to terminate preferential tax policies that have expired. Also, we must resolutely eliminate and correct unauthorized introduction of tax exemption and reduction policies in disguised forms such as first levying taxes, then granting rebates. We will steadily promote the horizontal computerized integration of the bank accounts for the tax revenue of finance departments and tax departments with the treasury across the country to improve collection and management of all types of tax revenue, including revenue from VAT and corporate and individual income taxes. We will steadily proceed with the trial reform of the tax expenditure system. We will make a comprehensive review of and standardize non-tax revenue, resolutely eliminate inappropriate and illegal non-tax revenue items, and improve non-tax revenue management policies and systems. The focus of this effort will be on formulating the Measures for Managing Government Funds and the Measures for Collecting and Managing Non-Tax Government Revenue. All revenue and expenditures for land transfers will be put under local budgetary control to improve oversight and management of revenue and expenditures for land transfers and to further strengthen the collection and management of resource-based revenue such as that from land, sea areas and mineral resources. We will strengthen the management of benefits derived from the state-owned assets of administrative bodies and public service institutions by putting the revenue derived from the compensated use or disposal of these state-owned assets under budgetary control as non-tax revenue. We will keep revenue and expenditures separate and make a diligent and constant effort to ensure success in the trial to separate the income of individuals from the administrative powers of their employers and from the state-owned assets managed by their employers to promote standardization of the pattern of income distribution at the source. We will strive to collect all revenue due to ensure steady growth in government revenue. (More)