A Study Of VAT Transformation In China

Currently, the VAT revenue is the most in the whole taxation, and account for a large proportion of the state tax revenue, even the state finance revenue. It is one of the majority taxes in our country. We chose the Production-based value-added tax in the tax reformation, based on the economics situation in 1994. That type of value-added tax accord with the demand of economic development at that time. It played an importance role in promotion the economic growth and restrained the fast fixed assets invention. But there are many problems since we chose that type, including restrain the enterprise renewing equipment, unfair taxation burden, not good for domestic products participating international competition, and so on.For the demand of the current economics situation and under the policy of revitalizing northeast china, we advanced the pilot reform of VAT transformation in northeast china. We picked equipment manufactory and other seven industries, using incremental deduction method. The pilot policy has been worked more than three years since 2004. The pilot reform of VAT transformation has made great impact on the local economics and enterprise behavior. But there are still many problems need improvement. Further, whether the taxation policy is useful in revitalizing northeast china or not is always the focus. This paper exactly begins with this point, use econometrics methods to do empirical analysis based on the result of the pilot reform. We use Granger Test and Error Correction Mechanism to do quantitative study, and reference some foreign countries successful experiment on consumer-oriented value added tax. At last, considering the currently economics situation, we hope to give some advices on the VAT transformation.