Informal Employment And Tax Policies

Since the beginning of reform and opening up, Chinese informal employment has obtained a greater development space, which becomes a vital channel to solving the employment of the urban new labor resources and the floating population as well as to absorbing the rural surplus labor forces. But there are some congenital disadvantages in the informal employment. Informal employment consists of employment of informal sectors and informal employment of formal sectors. It has become the main employment channel and newly-increased source of employment of most developing countries, and the employment development trend of developed countries at the same time.Tax, as one of government's important macroeconomics adjustment means, will exert an influence on informal employment. The specific feature of this paper is that it first analyzes the relationship between informal employment and tax policies. The conclusions drawn by analysis can be shown as follows:1. The influence of tax policies on informal employment. This text draws support from the foreign research approach, and has carried on a positive analysis with the relationship between tax policies and informal employment. The result indicates, in order to encourage the development of informal employment, our country should reduce the tax burden of the persons choosing informal employment properly, but not weaken the intensity of tax regulation.2. The main features and the development obstacles of informal employment. The main features of informal employment can be described as: unbalanced development of different regions, low quality of informal employers and employees, etc. And there are also some obstacles in the development of informal employment, for instance, policy obstacle, fund obstacle, human resources obstacle and security obstacle etc.3. The flaws of tax policies related to informal employment. At present, our country has already set out many tax expenditure policies related to informal employment, but still there are a great deal of drawbacks in the present policies, for instance, the heavy tax burden of labors of informal employment,imperfect aspects of the existing tax items, etc. Therefore, in order to promote the benign development of informal employment of our country, we should optimize the current policies.4. The improvement of tax policies related to informal employment. In order to promote the informal employment tax policies, we need to do something. First, the optimization of informal employment tax environment. Second, the optimization of informal employment tax structure, such as, perfecting the current tax items, levying the new tax items as soon as possible, making the tax expenditure policies inclined to the informal employment, etc.