As the Red Army achieves victory, Soviet areas expand, and the revolutionary movement surges forward, the principles of the Soviet fiscal policy should be as follows: (1) place the burden on the exploiting classes—primarily by imposing fines on landlords both inside and outside the Soviet zones, soliciting contributions from rich peasants, and levying appropriate taxes on merchants without undermining the economic development of the Soviet regions; (2) vigorously pursue economic construction, break the enemy’s blockade through the development of the national economy, curb merchant exploitation, and thereby increase Soviet fiscal revenues; (3) rely on the revolutionary enthusiasm of the working peasantry to collect suitable land taxes to replenish the state treasury. These constitute the fundamental principles of Soviet fiscal policy.

Guided by these principles, the Soviet fiscal organs must employ revolutionary methods, sound organizational structures, and rigorous planning to expand fiscal revenues in line with the progress of the revolutionary war. Any departure from this approach—whether through a conservative mindset divorced from political tasks or through chaotic, unplanned operations—is highly detrimental.

In the past, under the supervision of the People’s Commissariat, the Soviet fiscal organs achieved considerable success in meeting the needs of the war effort and in establishing an accounting system. However, they failed to adhere to the correct policy guidelines, chiefly by not making maximum efforts to raise funds from the exploiters and to increase revenue through the development of the national economy. Instead, they concentrated almost exclusively on tax reforms and the issuance of paper currency and government bonds, while simultaneously underestimating the pace of revolutionary development, resulting in a lack of systematic planning. This has seriously hampered large-scale financial administration.

With regard to leadership, instead of relying on city and rural soviets and workers’ and peasants’ mass organizations to mobilize the broad masses, the relevant work was entrusted solely to a small number of cadres at the district level and above, which prevented the full accomplishment of the assigned tasks. Such bureaucratic modes of leadership remain deeply entrenched within the Soviet fiscal apparatus.

On the question of cadres, insufficient attention was paid to training and promoting a large contingent of fiscal personnel, while instances of corruption among certain elements went unchallenged and unpurged. All of these shortcomings stem from the failure to implement the correct class line and from an opportunist assessment of the revolutionary situation. Comrade Deng Zihui, the People’s Commissar for Finance, bears the primary responsibility for this situation.

The People’s Committee deems it intolerable for this state of affairs to persist and hereby orders Comrade Lin Boqu, the newly appointed Minister of the People’s Commissariat for Finance, to undertake a thorough reorganization. This is to be accomplished by launching a comprehensive self-criticism throughout the entire fiscal system, correcting erroneous understandings of fiscal policy, formulating fiscal plans that correspond to the evolving demands of the war, transforming leadership practices, promoting and training a large cadre of fiscal officials, and eradicating corruption and degeneration within the fiscal apparatus. Only in this way can the entire Soviet fiscal system be swiftly brought into good order, enabling Soviet finance to keep pace with the revolution and providing the revolutionary war with adequate financial resources to completely defeat the Nationalist Party’s Fifth “Encirclement and Suppression” Campaign launched by imperialism.

Issued herewith.  Chairman Mao Zedong, Vice Chairmen Xiang Ying and Zhang Guotao, August 15, 1933.