Research On VAT Evasion Based On A-S Model

Tax evasion can erode national revenue, restrict normal exertion of national economic function, and aggravate the unfair distribution between honest taxpayers and tax evader. What's more, it will always erode the macro-policies effects by the government. So the problem of tax evasion has long been the focus for revenue authority. This dissertation has analyzed the affecting factors of tax evasion, and emphatically discuss the problem of VAT tax evasion in our country based characteristic of Chinese tax system.This dissertation introduced the VAT tax system of our country, summed up the affecting factors of VAT evasion firstly. Following the classical A_S model, a VAT tax evasion model is built up within the framework of comparative static framework. The new model modifies the classical one in several aspects, enables it embody the China circumstance more suitable. The improvements include the introductions of the audit level, tax compliance cost, and tax amount instead of unreported income. Further researches unveil some disadvantage of the VAT evasion model. Then, some broader considerations have been taken in such as the regulation characteristics, collection mechanics, the cost/revenue ratios, and the deductible ratio in enterprise cost. These improvements draw out the final comparative static model. By using this model and comparative static analysis, the effecting factors and directions of VAT evasion has been deducted, and a conclusion has been made: capability of audit is an important factor for tax player's evasion decision-making, it will be take into account while discussing the affection of tax compliance cost, tax rate, punished rate, probability of being audited to tax evasion. While tax players deem that the really punishment is higher, It can restrain tax evasion that probability of being audited, punished rate, capability of audit is increased. And while tax players deem that the really punishment is lower, it can increase tax evasion that tax rate, tax compliance cost, the rate of cost with respect to gross revenue, the rate of deduction cost with respect to gross cost is increased. To make a further study of affecting factors of VAT evasion, questionnaires have been made to investigate the problem, this dissertation researched pertinences between the affecting factors and VAT evasion by using empirical method, and validated the conclusion of academic model by using statistical data.In order to integrate the research with the practice in China, the dissertation has analyzed the realistic phenomena of VAT evasion. Based on the audit statistical data promulgated by the revenue authority and related studies, discussed the scales of VAT evasion in China and practical status of the affecting factors of VAT evasion. Based on the realistic analyses of the affecting factors of VAT evasion, the dissertation indicates the insufficiency while the revenue authority of China avoided VAT evasion. Finally, combining with the conclusion of the theoretical analysis, empirical study and realism analysis, the dissertation gets the basic trains of thoughts about how to settle the problem of VAT evasion properly and more roundly.