Research Of The Impact Of VAT On The Oriental Airlines

In1994,China implemented the tax reform, tax sharing between national tax andlocal tax. At that time, double main taxes both income tax and turnover tax, whichinclude VAT tax and business tax, was established by the state Administration oftaxation. In2009，our VAT changed from type production type to consumption type,although it’s a important step in the tax reform process, this transition still failed inbreaking the two parallel pattern. This situation not only caused by the doubletaxation of enterprises that let they burden more tax press, but also make VATdeduction chain fracture. So how to break this two parallel patter and expand thescope of VAT has got more attention in academia. Most scholars think, the only way toachieve the tax neutral principle, improve the scope of VAT is promote integration. InNov.16th2011，The ministry of finance and the state administration of taxationissued <The Policy of the business tax transform VAT>, which agreed by the statecouncil.〈The Policy〉indicates that the transportation industry should be the top priorityof industry reforming because of its external and public character. As the basis of thedevelopment of national economy, transportation industry is closely relate to thecurrent value-added tax industries. Tax on transportation industry through VAT isbenefit to build the turnover tax system which can adapt to the modern marketeconomy system, and improve our countr’ys industry market competitiveness. Fromthis essay, it combines all academic opinions about the adoption of tax transportationindustry through VAT and satates the necessity and feasibility of levying it on VATinstead of business tax. It also analysis one case about the Oriental airlines—one ofthe listed company in Shanghai, and shows the impacts and the problems atfer thereformation of business tax, then find the way to improve and solve all the problemswhich can help the reformation.