Tax Research And Application Of Cge Model In Yunnan Province

After a series of pilot tax reform work start to run, which include broadening theVAT collection range, collecting the real estate tax and adjusting the individualincome tax, a new round of the Chinese tax system reform work has formally liftedthe curtain. Each round of tax reform not only influences the scale and structure of thegovernment’s financial revenues, tax system itself also bears the other two bigfunctions, namely the resources configuration guide and the income distributionadjustment, the production tax indirect influences the resources’ flow directionbetween the industries, and the income tax directly determine the enterprise andresidents’ quantity of after-tax incomes. These changes and adjustments will furtherproduce the "butterfly effect", make a huge impact to the overall development of thenational economy, which is considered that one change makes all changes. Therefore,how to design a new round of tax reform scientifically and reasonably evaluate the taxreform’s impact to the national economy running, have become the common problemsconcerned widely in the finance and tax circles.The computable general equilibrium (CGE) model based on Walrus’s generalequilibrium theory is a kind of standard analysis tool used in economic forecast andpolicy simulation, which is rapidly developed and widely applied in the world. Atpresent researches and applications to CGE models have been quite common andmature in foreign countries, the model’s research at home is still in the stage ofdevelopment, some domestic research institutions and scholars have established theCGE model accord with the situation of China, apply it in the fields such as taxes,financial, energy and so on, and have made some important research results. Thispaper has fully absorbed in his predecessors’ achievements, and on the basis of theactual conditions of Yunnan province, try to set up a tax CGE model in keeping withthe Yunnan’s economic development situation, so as to provide a tool for forecastingand studying the tax reform’s influences on Yunnan’s economic development, andimprove the government’s scientific decision-making level. This paper is divided into six chapters, the first chapter presents the topic’sbackground, research meaning, the article’s framework and research methods; Thesecond chapter basically reviews CGE models’ development situation at home andabroad, theoretical basis and application in all economy areas; In the third chapter wechoose CES production function, CET function, import substitution function and C-Dutility function, according to economic system’s some characteristics, completelyestablished the basic structures and contents of the model; In the fourth chapter basedon Yunnan’s six department social accounting matrix, we estimated all the parametersin the model with calibration method; In the fifth chapter we solved the model, andsimulated tax cuts’ impact on Yunnan’s economic development between directtaxation and indirect taxation；In the sixth chapter we drew the final researchconclusion of this article.