The Liquidity Risk Management Of Financial Leasing Industry In The Environment Of The VAT Replacing Business Tax

Financial leasing is the forefront of financial industry in VAT Transformation. From the beginning of 2011 pilot promotion to replace business tax with VAT, the reform experience has an important significance for the financial industry turnover tax. It reduced the industry’s tax burden, and played a good role in promoting the development of economy and society. Of course, due to historical reasons and the complexity of the reform, they will also bring some impact, which is the origin of my paper’s idea – to discuss the liquidity shocks to financial leasing industry in the progress of replacing business tax with value-added tax(VAT).First this paper states the basic situation of industry overview, industry tax system environment and the case. Then on the theoretical basis of financial leasing industry and risk management, it calculates the effect on Far East Horizon’s liquidity by using cash flow, liquidity gap and pressure testing method, and that verifies the shock. Through the analysis this paper argues that impact on liquidity can not be ignored in the reform, finance leasing company need to take the risk seriously.Combined with the measure of impact on liquidity, suggestions are put forward in this paper to increase the liquidity risk management of enterprises to deal with the reform of VAT. Enterprises need to establish a set of risk assessment mechanism, only from four dimensions- the objectives, risk identification, risk analysis and risk response can we address the risk. For the defects of corporate liquidity risk management, this paper argues that the enterprise can establish liquidity risk indicators of VAT, use more stress testing in order to guard against the extreme test, actively carry out risk management of assets and liabilities side, try more asset securitization and other risk transfer means.