The Analysis On The Economic Effects Of Expanding The Scope Of VAT

In2009, the VAT system changed from the production type to the consumptiontype, so it is the new breakthrough of our tax system reform. However, it does notbreak the situation that two parallel pattern of VAT and the business tax still exist, andthe problem of repeated tax on the service is still serious, this transition still failed inbreaking the, VAT deduction chain is not comprehensive as well, so it is a keyproblem to be solved in the process of carrying out the tax reform in the future. Basedon this background, aimed at promoting the industrial structure, developing theservice industry, wiping out the problem of repeated tax through enriching thecategory of VAT, our country has put forward the policy that we should improve thetax system which is include in the Twelfth Five-Year Plan. As a result, it will be thecore problem of perfecting the turnover tax system in the future.Combined with the situation of pilot on expanding the scope of VAT, the paperdo the empirical analysis on the economic effects of expanding the scope of VAT, thengiving some suggestions combined with the results of the analysis.There are five chapters in this paper. Chapter One introduces the background ofthe topic, the thought of this research, and so on. This part firstly describes the goalsof the study and the importance of the problem, the current conditions of the researchat home and abroad, as well as the methods of the research and paths, and theinnovative ideas and shortcomings are also described. Chapter Two in this paperbased on the transformation of VAT reform, analyzing the problems still exist after thereform of VAT, then drawing out the necessity of expanding the scope of VAT andintroducing the pilot of the reform and reform ideas. Chapter Three takesTransportation industry for an example, measuring the change of tax in the totalindustries, Listed companies and the influence of the residents welfare through thedifferent tax rate. So we can draw the following conclusions: if we levy the VAT tothe transportation industry at the rate of13%, the tax burden of the enterprises will beheavy after the tax reform, and the welfare of the resident will decrease slightly; if therate is set to11%, the tax burden of the enterprises will be smaller. Chapter Fourcalculates the influence of financial income by the Input-output table from the macroaspect. It is not difficult to find that, if the rate is set to6%,11%,13%, the financial income will decrease, while the revenue will increase at the rate of17%, in themeantime, the rate of13%will have a small influence on the revenue. In addition, thispart also introduces the impact of the local fiscal revenue after the reform. The localgovernment should establish new subject categories of taxes. According to the resultsof above, Chapter Five gives some useful suggestions from three aspects: how toexpanding the scope of VAT, how to determine the rate and how to coordinate theincome between the central government and local government. From the perspectiveof the path of the expanding scope, the one time way will shock the revenue, given theconditions of our tax monitor and tax management, we should adopt the step by stepmethod. From the decision of the tax rate, we can not increase the rate of VAT, and itis suitable to set the rate of production service by13%, and we can also adopt theeasier method to levy, so it will not increase the tax burden of the enterprises, neithershock the revenue. As a result, based on current situations, the local revenue agencyshould levy the VAT of the service after the reform, and it is suitable that the revenuebelongs to local government.