Research On Chinese Reform Mode Of Business Tax To Value Added Tax In Finance Business

At present, Changing from Business Tax to VAT of China’s transport and part ofthe modern service industry is going on, but on the financial sector, it only stipulatesthe principles apply to simple collection methods.Under the background that nospecific reform schemes in Finance are put forward in “Replacing Business Tax withVAT pilot program”, this thesis is aimed to study and design the levy scheme ofreplacing Business Tax with VAT in Chinese financial business.Firstly, it analyses the existing problem of the financial business tax, studies theimpact, to replace Business Tax with VAT, on financial industy tax burden, andcalculates that the cirtical point of tax burden is5.82%after implementation ofvalue-added tax on financial industry. Research shows that the overall tax burden offinancial industry declines after the implementation of easy collection measures, andthe actual tax burden of future financial industry after replacing is closely related withthe critical point. Secondly, taking the commercial bank as an example, according toAustralia-Singapore financial industry value-added tax mode, it tries to constructChina’s financial industry value-added tax collection mode. This mode requirescommercial bank to clear the scope of exemption that the general taxable items collectvalue-added tax should be according to the general way and the tax rate should be lessthan12%, the exemption should allow19%of the input tax deduction. Throughcalculation, after using this mode, the overall tax burden of commercial bank anddouble taxation will decrease, so it is feasible in our country.Through the above research, according to the guiding ideology “to replaceBusiness Tax with VAT”, the author suggests that this replacing in our country shouldhave three steps: first, taking temporary measures to the simple levy on the financialindustry, and making the financial sector into value-added tax levy range, to break theexistence situation of two taxes. Second, when the time is right, referring the input taxdeductible by ANZ mode, we can have a transition to international practice andimplement the value-added tax. Third, all financial business should be included in thescope of taxation when we have a new design of VAT rates, and eventually ourcountry will realize the comprehensive value-added tax levy in financial industry.