Reaserch On The Effect Of Levying Value Added Tax In Lieu Of Business Tax In Communications And Transportation Industry

Tax revenue is the main source of fiscal revenue and the important tool to adjust the income distribution. Since the reform and opening up,the tax system of our country has been improved constantly, but there are still some defects. In China, value added tax and business tax exit at the same time. The business tax is levied on the full operating revenue of the trading activities and in every part of economic activity, so there is a phenomenon of double taxation; while the value added tax is only levied on the value added part of each transaction, which avoids the phenomenon of double taxation. Currently, china levies business tax on transportation industry while most countries levy value added tax, which leads that the taxation burden is relatively heavy in transportation industry in our country and there is a phenomenon of double taxation, the deductible chain of entire national economy is not perfect. With the rapid development of the economy, the need of tax system reform in China is becoming more and more intense. It’s urgent necessary for our country to use tax system reform to optimize the economic structure and promote the industrial upgrading, therefore our country implement the reform of levying value added tax in lieu of business tax.The pilot reform program of levying value added tax in lieu of business tax was implemented in the transportation and some other services sectors in Shanghai on January 1, 2012, and then extended to the whole country from August 1, 2013. From January 1, 2014, it increased the railway transport and postal services, and the telecommunications industry was implemented from June the same year. In January 28, 2015, the State Administration of Taxation said that the tax reduce effect of the reform of levying value added tax in lieu of business tax was obvious, the structural tax reduction effect was distinct, the tax burden on enterprises reduced, the profitability of the enterprise improved and international competitiveness increased substantially.Transportation industry has a close relationship with all kinds of economic activities. With the development of economy and the rapid expansion of the scale, the transportation industry has become the key industry to promote the rapid development of the national economy. Implementing the reform of levying value added tax in lieu of business tax in transportation industry is beneficial to reduce the tax burden in this industry, increase enterprise profitabilities, improve market competitiveness, optimize the industrial structure and promote economic development. As an important commercial and logistics city, Linyi has enormous volume of freight. In consideration of its representativeness, this paper selects transportation industry in Linyi as the empirical analysis example.Through theoretical analysis and positive analysis, this paper analyses the effect of levying value added tax in lieu of business tax in transportation industry in Linyi. Through the analysis of the data about the industry status, tax and enterprise operation, the paper would analyze comprehensively the aspects of industry development, tax changes and enterprise operation ability in transport industry, make a conclusion according to the reform effect and finally find out problems. Then it will put forward the suggestions and countermeasures from two aspects: On one hand, put forward suggestions and countermeasures in policy level of levying value added tax in lieu of business tax; On the other hand put forward advices in business management level.