Tax Burden On The Operating Performance Of China’s Banks

In analyzing the operating performance of the banks, academics tend to focus on the internal factors which affect the banks operating performance, while ignoring the external factors. Currently, the tax burden has become an important external factor which affects the operating performance of China’s banks. Is the banks’ tax burden too heavy? What are the problems of the current tax system? How do these problems hinder the development of the banks? Now we need to study and explore.In this paper, there are six chapters to analyze the impact of the tax burden on the operating performance of China banks. First of all, to define the concept of banks operating performance, and describes the mechanism of the tax burden on the banks operating performance; Second, we introduce China banks current tax system and its development course,and describe the relationship of the banks tax burden and operating performance; Again, using panel data regression method we study the relationship between tax burden and banks operating performance; The last,we make a special study on income tax and business tax which most affect banks operating performance.This paper makes the following conclusions:the relationship between tax burden and banking operating performance is negative, the banks tax burden is heavy; the negative effects of the business tax burden on banks operating performance is heavier than income tax; business tax rate and tax base of China banks’ are not enough reasonable. Accordingly, this paper presents some policy recommendations, for corporate income tax in China should be more reasonable deduction provided for doubtful debts, improving the administrative efficiency of the approval; for business tax we should reduce the tax rate and narrow tax base in short term, and we should use value-added tax in long term.