Research On The Problems And Countermeasures Of Tax Risk Management In Jiangsu Local Tax

As the domestic economy and the number of taxpayers are growing rapidly, the old tax collection and management system cannot meet the present need. In order to increase the efficiency and the pertinence of tax source management, it is necessary to reform the current tax collection and management system by optimizing labor specialization and resource allocation. The domestic tax risk management came into being using foreign experience as reference. However, because our tax risk management is still at a groping stage, improvement is needed with respect to management philosophy, operation mechanism, performance evaluation and team construction. To realize the improvement, it is essential to evaluate the performance during implementation, detect problems, determine causes and find solutions accordingly. So far, tax management has experienced several times of adjustment. Yet, there are still questions to be considered, such as whether the system has reached the optimal performance point or not, and what kind of improvement can be made. Jiangsu Local Taxation Bureau, as one of the national pilot units, directly affects if the present tax risk management can be promoted national wide based on its own performance.This paper will discuss the following five topics. First of all, it states theories of tax risk management. Secondly, it discusses the current situation of risk management including institution setting, implementation procedure and result executed by Jiangsu Local Taxation Bureau. Thirdly, it analyzes problems occurred and the potential causes such as obscure responsibility division, incapability of workload quantification and lack of talent’s incentive mechanism. Forth, it refers to foreign experience to promote accuracy and validity of third party information and institution setup. The last but not the least, it provides advice for improving tax risk management especially in the aspects of management philosophy, operation mechanism, and performance evaluation. Although there are studies conducted about tax risk management domestically and internationally, most of which are limited to theoretical study. This paper integrates theoretical research with practice conducted by Jiangsu Local Taxation Bureau. In particular, it analyzes the actual implementation process and effect in the past four years, reveals the existing problems, and suggests viable solutions. To conclude, the paper provides theoretical basis to carry out tax risk management effectively, points an efficient path of reality practice and gives suggests for national promotion.