Feiteng Company's 2 Years

This is a case to study the tax evasion. This article composed by 2 parts : first part is case and the second part is the case study.After following up a small size company for 2 years, the writer of this article introduced the practice how a company to evade the tax in the first part.Basing on the case and a lot of information, this article analyst the key factors for the tax evasion using A-S model in the second part. This article analyst pointed out the main defects of the current tax system:1. The tax rate is too heavy. It makes the expected gain of tax evasion much bigger than the expected loss of punishment. Thus the tax evasion increased.2. More attention is put to the tax rate instead of tax collection and supervision. This resulted in smaller chances to be caught when there was a tax evasion. This is one of the reason that tax evasion increased.3. The value added tax payers are divided into general tax payer and small size tax payer. This makes the supervision more difficult and injures the willingness of small size tax payer to pay tax.4. Tax reduction by a local government creates unfair competition.5. The right and the obligation of a tax payer are not balance; the law for tax is under development. Those are obstacles for the tax payers to pay tax consciously.Basing on the above mention analyst, this article also provides suggestion to improve the current tax system.