Hello, transfer payment is divided into general transfer payment and special transfer payment. Definition of transfer payment: transfer payment is an intergovernmental subsidy. It is a financial fund transfer or financial balance system based on the difference of financial ability of governments at all levels with the theme of realizing equalization of local public services.

The reasons for transfer payment are: some local governments have low financial capacity. With the efforts of average taxation, the income obtained is not enough to meet the expenditure demand of the most basic public services. The externality of public goods supply will lead to the shortage of public goods. Local governments have their own priorities in fiscal expenditure and investment, which may be inconsistent with the investment priorities and screening standards of investment projects considered by the whole country.

I. Type of transfer payment:

1. General transfer payment mainly refers to the other party's financial subsidies, which are not earmarked for special purposes, and the local government arranges its own expenditures;

2. Special transfer payments mainly serve the specific policy objectives of the central government, and local governments use funds according to the purposes stipulated by the central government.

Two, China financial transfer payment system:

1. On the basis of 1994 tax-sharing reform, the state gradually tried out the transfer payment system to solve the problem of regional revenue and expenditure.

2. Transfer payment method:

(1) Institutional subsidy is an unconditional transfer payment reserved by the graded lump sum system before the tax-sharing reform.

(2) Special subsidies are special funds allocated by the central government to local governments. Local governments must use these funds for projects designated by the central government.

(3) Tax rebate refers to the tax rebate made by the central government to local governments to protect vested interests after 1994 implemented the tax-sharing financial system.

(4) Formula subsidy: some funds are extracted from the central government's revenue increase, and some subjective and objective factors that have a great influence on local revenue and expenditure are selected, and relatively standardized calculation methods are adopted to implement transfer payments to various places.

Special transfer payment refers to the special subsidy funds set up by the higher-level government to realize specific macro-policy objectives and compensate some affairs entrusted to the lower-level government. The fund donee shall use the fund in accordance with the prescribed purposes.