Study On The Situation Of China’s Existing Preferential Tax Policies

Building a socialist harmonious society is a major task which is put forward by Chinese Communist Party in view of building a well-off society and creating a new situation of the cause of socialism with China’s characteristics.And it is a very important strategic decision to realize the great rejuvenation of Chinese nation and to develop universally, coordinated and sequentially. That meeting the objective of China’s reform and development which has entered a crucial period, and reflect the fundamental interests and common aspirations of the people. Tax is the main source of state revenues, and the state macro-control is also an important economic lever, that plays an important and irreplaceable role in building a socialist harmonious society. To study preferential tax policies which are the most important components of tax policies of China in the harmonious social background, has important practical significance. The purpose of this study is resulting to do something beneficial in this regard. With the fundamental concept based on domestic actual state and aimed to service for domestic practice, consulting the overseas achievement and experience, emphasized on the analysis of our existing preferential tax policies, with the guidance of the scientific concept of development, in an attempt to introduce the concept of public finance and tax-related expenses, some preferential tax policy and proposals are aroused which may service for our country now and in the future.In addition to the introduction, the structure of this paper is divided into three chapters.The overall situation of China’s existing preferential tax policies is introduced in the first chapter in this paper. This chapter can be divided into two levels. In the first level, the concept and classification of tax preferential policy, the main form of economic effectiveness of the existing tax concessions are defined and exposited. As to tax incentives, that is defined as preferential tax revenue distribution activities in this paper, is a special form of inherent expression and on the premise that a national tax legal systems is unchangeable, in order to achieve certain political and economic goals, in the statutory framework, due to the state’s tax revenue, it is a kind of policy which directly transferred the tax to individual taxpayers to release the burden on taxpayers related to a system. In essence, it is transferred to a small number of taxpayers by the government on behalf of all taxpayers,which is a necessary complement to the base.In this chapter, the second level is the major part. The author focuses on the pros and cons of tax incentives for a more comprehensive analysis. On the positive effect of the analysis, the important effect and the existing necessity are analyzed in theory, mainly from the point of view that the tax preferential policy revise the internal and external effects, make up for the market failure, encourage technological progress and independent innovation, protect environment, utilize resources comprehensively and balance between efficiency and fairness. Analysis of the negative effects, mainly from tax incentives contrary to the principle of fairness in taxation, will easily lead to economic distortions. thereby affecting the effective allocation of resources; a direct result of the implementation of preferential tax revenue reduced; a lot of complicated tax system involving many types of preferential policies, increase the difficulty of collection; preferential tax policies for the regulation of income distribution in the reverse; preferential tax revenue increased costs; external benefits such as tax concessions made six analysts. Among them, tax breaks for the cost analysis is part of the broad cost of the tax incentives should include:First, tax breaks enacted relevant laws and regulations and the cost of standardized documents. Second, the economic costs of tax incentives, including preferential tax policies for the implementation of the reduced tax revenue. Tax revenue generated by reducing the opportunity costs of tax incentives in the allocation of resources resulting from the negative impact of the cost caused by the complicated management system is not in place, such as the loss of tax revenue caused by four. Third, tax breaks and tax authorities of tax administration led to increased costs, include tax incentives and tax authorities to strengthen the management of publicity, counseling and determined that the cost of inspection, strengthen the management of the tax concessions opportunity cost. Fourth, tax incentives lead to increased costs related to the taxpayer’s taxable pursue taxpayers:including related costs. taxpayers have benefited from tax legislation to try to influence the cost of rent-seeking, eligible for preferential access to non-target groups and the leasing costs.In the second chapter, the preferential tax policy related to build a harmonious society has been worked over. Furthermore, current policies themselves and the current economic and social impact has been thought a lot. the authors have chosen to develop hi-tech industry, agriculture, the development of the western region. environmental protection and other aspects of tax concessions for four specific inspection and analysis.In the third chapter, the preferential tax policy design and direction of reform has been put forward on the basis of previous two chapters and study and learning from experience. In design, closely focus on the strategy of sustainable development, We have to formulate preferential policies in taxation of man and nature, man and the harmonious development of our society. good job of handling the relations between economic construction and utilization of resources, the ecological environment, and promote the whole of society to embark on the development of production, an affluent life. Eco-road of civilized development, and play a positive and effective role in promoting from a revenue perspective for implementing the scientific development concept, promoting the building of a harmonious socialist society. Also, in an attempt to study the introduction of tax concessions on public finance, the idea of tax-related expenses, in the formulation of tax policy, we should not only pay attention to the process of implementing the scientific method and effectiveness of the policy itself. Taxpayers should pay attention to the right to know and participate. In order to further improve our country,"of everyone fortune running the business," the public finance systems, the establishment of public finance in the real interests of the people on the basis of fundamental values. to provide better public goods and services and promote socio-economic development in harmony. Specific content of this chapter is divided into three parts.In the first part, the successful method in America, Japan and Korea has been introduced and the deep thought of the reference to China has been put forward. From the practice of preferential tax, which is worth learning from the following main points:1. The implementation of regional preferential policies to maintain unity within the region so that the unfair foreign competition. Second, the industry should fully embody concessions oriented industries, focused on promoting high-tech industries and knowledge-based economic development. Third, the tax incentives in the form of flexible and diverse, pluralistic policy instruments, Indirect focus shifted from the main focus of direct benefit concessions to improve the overall effectiveness of tax incentives. Fourth, a preferential tax policy has clear objectives and concrete measures of a country’s economic situation and economic policy. Policy changes to the timely adjustment of the basis of objective economic development, and to maintain control over the implementation of preferential policies for efficiency. Fifth, a preferential tax policy has legality.In the second part, the problem of our current tax policy and the policy itself in the management has been summarized and analyzed. China’s existing preferential tax policies in the management of the problems are:in the formulation of tax policy. given the lack of concessions on the general layout, feasibility, the feasibility of the possible effects of the implementation, serious study, full demonstration, and the recipient policy for the taxpayers very little, listen to their opinions, after the introduction of a policy is often the result of this policy and the state of mind is a serious deviation, not achieve the desired results. Policy formulation and the introduction of more experience judgment, logic and leadership intentions, is rarely associated with the volume and cost-benefit analysis. Tax concessions management qualification as a main focus on the prior identification, examination and approval, the applicable tax rates. policy review and approval, so long as the business was through these procedures, will be entitled to related tax incentives, After the lack of the necessary regulatory means. After not evaluate and assess the performance of the policy, tax exemptions apply to ignore the test results and feedback, resulting in excessive and indiscriminate policy, And it is very poor. China’s existing preferential tax policy in regard to the main issue:tax breaks too broad in scope, the scale is too large. Means of preferential tax policies to direct preferences, the relative single. The system of preferential taxation policies and lack of coordination. Lack of cost analysis of the concept of tax concessions.In the third part, some proposals have been advanced from three aspects, that is the management of tax incentives, preferential tax system, tax incentives and other measures to improve our current tax concessions.The proposal to improve the system of the preferential tax management is as follows:to improve the level of tax incentives and the legal status,to realize preferential tax legalization, the role of tax incentives to be within reasonable limits, tax concessions be in the clear direction, to strictly control the size of tax incentives, to increase in the taxpayer’s tax credit rating classification and management, to effectively increase the punishment to those that misuse preferential tax policies.The proposal to improve the system of the preferential tax system is as follows:to learn from the overseas matured experience to introduce of tax-management concept, to innovate preferential tax management system. According to the state’s macro-control goals and tasks, the functions and features of the tax, make scientific overall preferential tax policies for a certain period.To establish the feasibility policy, establish a sound source control management system, improve policy implementation process control systems, establish the performance evaluation feedback system of the policy implementation results. The proposal to improve the system of the preferential tax related policies is as follows:the promotion, counseling, increase the taxpayers and the entire community outreach; straightening out intergovernmental terms, unifying the tax policies further more and improving the tax system.