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In 1993-94, when the “Socialist Market Economy” policy encouraged a new wave of reform, fiscal reforms were put in place to clarify fiscal revenues and responsibilities, and it included three components: a tax-sharing system, tax modernization, and a reform of tax administration that separated central and provincial tax collection. The new tax- sharing arrangements allocated certain sources of revenues to the center (e.g., customs duties, consumption tax, sales tax, and profit taxes from centrally-controlled enterprises), to the provinces and municipalities (taxes on local enterprise income, house and property taxes, profit turnover taxes) and shared according to a predetermined ratio (the.