The Jilin CTT Business Supporting System And Performance Versus Accounting Checking Process Rebuild In Response To Tax Policy Changes (Business Tax Reforms To Value Added Tax)

According to the regulations from Ministry of Finance and the State Administration oftaxation, from1stJune2014, Chinese telecom industry begins to pay value-added tax (VAT)instead of business tax.The tax payment of above industry will be charged by several levers:basic telecommunication servicebusiness at11%; electronic data and informationtransmission, Internet access and other value-added telecom services at6%. In order tofollow this new regulation, every telecom service operator must change the existing3%businesstax into the “multi-level” based VAT.Recently, the Chinese big threetelecom operatorshave already established sufficientbusiness supporting system. The China Tie Tong (CTT)(wholly owned subsidiary by ChinaMobile Communications Corporation) has neither built up the nationwide businesssupporting system nor joined the China Mobile’s business supporting system because of thefinancial situation and self-operation concerns. The CTT just arranged province basedbusiness supporting system.Business tax change to VAT in China is the specific productsin the specific period.Many oversea countries have already adopted the VAT for a while. Therefore, the businesssupporting system is now able to provide data for VAT calculation propose and the systemitself do not have to make any change.In June2014, the domestic telecom industry began touse VAT; the China Mobile has completed the transformation of VAT business supportingsystem and adopted new financial system based on it.JTT’shas many existing business supporting system, such as billing system, broadbandcertification system, integrated income system, APS new business system,simple-package system and online billing collection system, etc.The JTT’s supportedmanufacturersare quite wide, such as HUAWEI, Hua Tai and other non-billing standingbook systems. In addition, the JTT’s hardware and software has been used for many years.In concern for the stable of these old business systems, the major operation change is notacceptable. The change from business tax to VAT demands the accounting-sales checksystem to change in many areas. Thus, the difficulty of making these changes is quite hard.This dissertation made the analyses on Jilin CTT’s billing system, operation systemand accounting-sales checking system and also made deep understand of newlyimplemented business tax change to VAT regulation. The sufficient study of the Informixdatabase, oracle database, SQL language and JAVA language are also performed in order toresearch on the technical issues. Finally, the dissertation came out with the suggestedsolution for Jilin CTT’s system change and process change in response to the tax policy change.The overall design structure is as follows: Firstly, re-design the existing system byadding “general taxpayer” information in the composite income system, rebuilding thecustomer enquire acceptance charge (refund) function and account cancellation function,etc; secondly, newly add in VAT system to adopt with the changes in the new tax regulation,which includes the VAT rate, billing and voucher system maintenance. At the same time,provide the expenditure and voucher statistics in order to manage the VAT relatedprocesses.By the end of the dissertation, suggested change of Jilin CTT’s billing system andoperating system in order to satisfy the functionssuch like general taxpayer management,user bill generate, VAT invoice printing after the tax regulation changes. Those mentionedare all necessaryprocess the telecommunication operator has to supply. This is aimed tocomplete the change of accounting-sale checking operation and make the data frombusiness supporting system and financial system are matched. Therefore, the Jilin CTT willbe able to pass the external audit.