On The Consumption Tax Adjustment Range From Tax Reform

Consumption tax is an important turnover tax and a tax police by hight hopes. Chinaestablished a consumption tax at1994. Since then, it has played a positive role in adjustconsumption, guarantee fiscal revenue, promote social fairness, optimization of industrialstructure and environmental protection. But after several reforms, the consumption taxsystem still exists deficiencies which has weakened it’s impact, such as having anunreasonable taxation base, lying particular stress on income function while ignoringeconomic regulating function, emphasizing economic effect while ignoring social effectand so on. Among these problems, unreasonable taxation base is the most prominent. Thescope is an important taxation component, emboding main function of tax. Consumptiontax is typical of selective levied taxes, and it is expected to achieve police goals in alimited scope. So a reasonable scope of consumption tax is especially important.Under the current framework of the structural tax reduction reform and guidence ofdeveloping green economy, the requires of adjusting the consumption tax base becomemore and more strong. This paper based on the orientation of China’s consumption taxfunctional, by theoretical and empirical analysis, takes current situation of consumptiontax, problems accompanied economic development, new changes of the tax system andinternational experience into account, to prove the rationality and necessity of tax basereform, and sort out the basis of adjusting the scope consumption tax covered clearly, aswell as find problems and the direction and path of adjusting consumption tax from theanalysis, coming up with advices for building a more adapted to China’s economic andsocial development reasonable consumption tax system with a more prominent function.This paper is divided into four parts. In the first part, after a normative analysis ofconsumption tax’s nature, characteristics and relationship with related taxes, I summaryand innovate the consumption tax’s function based on a more accurate understanding ofit. The second part discusses the necessity of adjust consumption tax base in detail,ground on it’s function orientation, combining theories, realities and emerging issues insocio-economic development and general requirements of the current tax system reform.The third part, referencing to international experiences，following basic principles ofseting consumption tax base and considering a variety of influencing factors, propose thespecific ideas for adjusting consumption tax in a structured way. The last part applyELES model and a deduction of greening consumption tax to showing the positive effectof consumption tax base adjustment intuitively and demonstrates the correctness of it.