Study On Collection And Management Of Individual Income Tax In The Condition Of Asymmetric-Information

With the developing of China's economy, the individual income tax (hereinafter referred to as IIT) gradually developed as one of the important types of tax. However, there are still some big problems in the management of IIT. This paper, basing on Asymmetric-Information Theory, has tried to announce various kinds of asymmetric information exiting in the IIT management, and then put forward the corresponding solutions to improve the collection and management of the IIT.Asymmetric information is a situation in which one side of an economic relationship has better information than the other. There are four models in Asymmetric-Information Theory: adverse selection, screening, signaling, and moral hazard. Principal-Agent model refer to any kinds of asymmetric-information relationship. The informed side is called agent and the other side is called principal.Usually, asymmetric-information in the collection and management of the IIT exits between the following subjects: taxpayer and tax staff, tax staff and tax authority, tax authority and other administrative departments, and different administrative divisions. The asymmetric information has caused the taxpayers'reverse selection and the tax staff's moral hazard, and also caused the poor efficiency of the tax revenue.According to the advanced experience of the management of IIT of the foreign countries and basing on the actual condition of Changzhou, we find the mainly problems are: the diversity and privacy of hidden individual income, the uncertainty of the tax regulations, the defects of incentive contract and the poor information system.In the last part, this paper put forward pointed solutions on the collection and management of IIT in the condition of Asymmetric-Information. It suggests: accelerating the construction of information system; establishing an individual economic identity code, which combines ID information, DNA information, social security information, individual income and expenditure information, tax information, credit information and medical information; setting up the cross examination system of individual income information to facilitate the information acquisition and management; constructing a strict monitoring system of individual income; improving the tax legislation; enhancing the compliance with the tax law by expanding tax auditing and enforcing stiffer penalties; improving implement of specific policies. In brief, a strong and powerful collection and administration system should be established, in which tax authorities is a principle part and related department do their best for collecting tax, to improve the collection and administration of IIT and give a full play of the role of IIT.