Research On The Influence Of "Reform Of Replacing Business Tax With VAT" On Air Transport Industry

"Reform of replacing business tax with value-added tax" is another important reform of China’s tax system since the reform of the consumption-type VAT. It is conducive to avoiding duplication of taxes, help to promote the deepening development of related industries and to improve the tax environment. It conforms to the principle of equity and efficiency."Reform of replacing business tax with VAT" was firstly carried out in Shanghai transportation industry and modern service industry in1Jan.2012. Now, it has been promoted to radio, film and television service industry, railway transport industry and post industry. The pilot areas have been generalized to the whole country. The positive effect of the reform is expanding gradually.Bringing air transport industry into the reform is quite beneficial to its development. Since a more standardized tax system is provided, it can relieve tax burden of enterprise, encourage renovation of fixed assets and technological updating, and guide specialized division and cooperation. However, some policies of this reform are not perfect enough, which have brought some puzzles to the enterprise. As a result, interests of the reform have not been equally distributed among various economic subjects. This paper will make a comprehensive and multi-level analysis for the influence of "Reform of replacing business tax with VAT" on China’s air transport industry and give some optimization suggestions.By setting the airline as major research object, this paper mainly use the method of case analysis. Introduction of the background of China’s air transport industry and changes of tax system before and after the reform is the basis of the analysis. Then, the direct influence of the reform on the tax burden is measured by taking A Airline as an example. Moreover, it analyses the indirect influence of the reform on each economic subject in the air transport industry chain, including the airlines, its upstream enterprises such as airports, aircraft leasing enterprise and its downstream clients. On this basis, this paper gives some improvement suggestions in view of the existing problems of the VAT system in China’s air transport industry. Finally, this paper puts forward some coping strategies to airlines about how to handle the challenges caused by the reform and enhance competitiveness.As for the innovation of this paper, firstly, it highlights the difference between air transport industry and common transportation industry and puts related business into the entire industry chain. Secondly, this paper takes A airline as an example and uses its financial data and other operating data for analysis. As a result, the research is more realistic, and the suggestions are more targeted and operable.The goal of creating air transport industry chain in China has intrinsic consistency with the goal of "Reform of replacing business tax with VAT". This round of tax reform is a favorable opportunity for the development of China’s air transport industry.