| Modern tax system originated in the late19th century, has undergone more than100years of development. Changes in the tax structure shows that a country’s tax structure largely depends on the level of economic development of the country, and the level of economic development and related system perfect conditions provide a basis for changes in the tax structure, and gradually become the driving forces. In addition, the adjustment and optimization of the tax structure can promote the economic and social development, and improve the fairness and efficiency of economic operation.The issue of the tax structure is also the focus of China’s tax reform. Tax structure formed by the tax system reform in1994, even after adjustments, still do not adapt to the rapid development of macroeconomic."Eleventh Five-Year" period, China has canceled the agricultural tax, merged domestic enterprises and foreign-funded enterprises income tax, raised the personal income tax exemption amount and implemented the VAT(value-added tax) transition from production-based to consumption-based. The adjustment of the tax structure effectively promotes the healthy development of economy and industrial structure optimization. However, the business tax, as China’s third-largest tax and local, exist outstanding problems and contradictions. Therefore, clearly stated in Article42of the recommendations of the CPC Central Committee on the Formulation of the12th Five-Year Plan for National Economic and Social Development, the government will speed up tax reform, expand the the scope of replacing business tax with VAT, reduce business tax accordingly, adjust consumption tax rate structure, improve the tax policy which is conducive to the upgrading of industrial structure and the growth of the service industry. On the practical level, starting from January1,2012, the reform of replacing business tax with VAT has implemented in transportation and modern service industry in the Shanghai. VAT and business tax are two of the most important turnover tax, and the sum of the two taxes accounts for nearly half of China’s overall tax revenues, so the the reform of replacing business tax for VAT has important implications. Reforming business tax and establishing a reasonable management system, can be said to be the focus and the main line of the tax reform of China’s "Twelfth Five-Year" period. Therefore, scientific and rational implementation of the the reform of replacing business with VAT is of great significance to the healthy development of China’s economy and society.The reform of replacing business tax with VAT is to optimize the tax structure to better meet the requirements of economic and social development. Current tax system, in which business tax and VAT coexist, is inefficient and unfair. Combing the changes in China’s tax structure, this dissertation discusses the driving force of replacing business with VAT, analyzes the economic effects of the reform, looks to the process and measures of replacing business with VAT. These studies can provide a theoretical basis for the reform of China’s tax structure.The dissertation consists of four parts:The first part is introduction. This part introduces the background and significance of the research, summarizes literature, points out the methods, ideas, innovation and deficiency of the research.The second part is the theoretical framework which can offer practical and theoretical support for the reform. This part points out the defects of China’s tax system in which indirect taxes are dominant, analyzes the cause and problems of coexistence of VAT and business tax.The third part is empirical analysis, including chapter3, chapter4and chapter5. This part studies the impacts of the reform on economic growth, industry structure, welfare and tax burden. This part can verify the previous theoretical analysis.The fourth part is measures and suggestions, including chapter6, chapter7and chapter8. This part analyzes the impacts of the reform on tax burden and fiscal revenues, puts forward recommendation from the point of reform orders, tax rate and tax sharing, and forecasts the expansion of the reform. This part can provides reference for the reform.The dissertation tries to do some innovation:Firstly, the research content is innovative. Replacing business tax with VAT has long-term impact on many aspects of economy and society. Domestic research is often one-sided, either limited to the effect of economic growth, or limited to the effect of the industrial structure, and so on. The article studied the impact of replacing business with VAT on businesses and residents from the microscope, and the impact on local governments and the central government tax revenue from macro analysis, the impact on economic growth, income distribution, industrial structure and technological progress from the macro scope, etc. Relative to the previous studies, this study is comprehensive and thorough.Secondly, the conclusions are innovative.We find that both business tax and VAT is mild fair, the welfare loss caused by business tax and VAT for the rich is larger than the poor, but is much lower than the income gap. In addition, for each income class, the welfare losses caused by business tax are slightly higher than the VAT.According to1994-2010data, we find that China’s actual tax burden of business tax is low by about half than the tax burden of VAT, but in recent years, the tax burden of VAT is decreasing, the tax burden of business tax is increasing. The higher the proportion of tertiary industry in the region, the more servere the tax burden of business tax. The tax burden of business in Beijing, Shanghai is as twice as the tax burden in other provincial areas.Taking full account of the increase in VAT tax credit, the change in corporate income tax, financial subsidies and other factors, we find that fiscal revenue reduction for the higher government is larger than the lower government, the larger for the developed areas than the less developed areas.The reform should be gradual and can be divided into four phases. In the first phase, the reform for the "1+6" industries should be extended across the country as soon as possible. In the second phase, the reform for post and telecommunications and railway transportation should be implemented across the whole country. In the third phase, the reform for accommodation and catering industry and other industries should be piloted in one or two regions in every province and then extended the whole country. In the fore phase, the reform should be extended to construction,real estate,financial services and other important industries from less developed areas to developed areas, and finally to the whole service industries. |
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