The Empirical Analysis On Banking's Tax Burden And Its Influences On Operation Efficiency

Banking is the core and pillar of our country's financial system. Its stability and development play an important role in the healthy operation of the entire national economy. In recent years, with the reform of domestic financial industry, especially the state-owned banks, tax has become an important factor of the commercial banks in the capital market. Though since the tax system reform in 1994, the tax system of the banking ever underwent numerous adjustment, with the quickening of the step opening to the outside world of the banking, a great deal of negative effects of the current tax system begin to appear. Both state-owned banks and joint-stock banks face the heavy tax burden. It not only restricts the improvement of banks'profitability and operation efficiency, but also has side effect on the banks'development and competition ability. Therefore, it becomes more and more imporant to intensify the reform of tax system.There are six chapters in this paper. Chapter one, which is the part of troduction, explains the background of the selecting topic, the research purpose, significance, ideas, method, structure and innovations. Chapter two is about the present condition of research both at home and abroad. This chapter mainly reviews on the related literatures in two aspects: bank's tax burden and operation efficiency. Chapter three is the analysis on the present situation of tax burden. This part firstly overviews the tax system and the evolution of Chinese banking history. Secondly, analyses the tax burden of the whole banking, state-owned banks and joint-stock banks by using the business tax index and corporate income tax index. Finanly, finds the problems existing in the current tax syetem: the business tax rate is too high, tax calculation basis is unreasonable, the reserve against bad debt and pre-tax deduction is not reasonable, etc. Chapter four makes a empirical test on the correlation between tax bruden and operation efficiency. At first, this part introduces the model, data resource and empirical method, and then, analyses the relationship between tax burden and operation efficiency with data from 1999 to 2007.The empirical result shows that: from 1999 to 2007, the Chinese banking's technical efficiency is comparatively high, while the level of profitability is generally low. After the stock reform of 2003, along with the improvement of governace and management capacity, the banking's profitability has significantly improved. However, the current high tax burden has a significant negative effect on the asste profit rate and technical efficiency of China's banks. In addition, the negative impact on the joint-stock banks is greater than the state-owned banks. So, to a certain extent, reducing the tax burden can improve the operation efficiency of China's banking. During the reform of operation efficiency, the commercial banks should not only focus on the traditionally internal factors, but also give full consideration to the external factors on profit and efficiency, such as tax. In the end, based on the empirical conclusion, this paper uses the outstanding experiences of foreign banks and proposes some relevant policies and suggestions combined with the actual situation of our country.