Research On The Effect Of The Polity “Replace The Business Tax With A Value-added Tax”

Transformation of ways to promote economic development is the key of government’s work. Based on the necessity of constructing a tax system that can benefit the scientific development, the government puts forward the “replace the business tax with a value-added tax” Policy, hoping that it can further promote the perfection of tax system and solve the problem of double-taxation; help the formation of social specialized division of labor, and give an important driving force on the “Three industrial Convergence”; save the enterprises’ cost brought by tax, and play an important role in the development of the enterprises. Also, the “replace the business tax with a value-added tax” Policy is a significant aspect of structural tax reduction, and it can help to regulate the national investment structure, promote consumption as well as adjust the import and export proportion, and it is of great significance to the healthy development of The Tertiary Industry and even the national economy. In conclusion, “replace the business tax with a value-added tax” Policy is the key and the most important element of the tax system reformation."Replace the business tax with a value-added tax" plays an important role, which makes the policy effect related to the assignment more and more valuable for government and scholars. From government’s perspective, tax reform of "replace the business tax with a value-added tax" is better adapt the changes. In addition, it is effective to carry out "replace the business tax with a value-added tax" for its development. This Paper starts from the basic theory of policy’s implementations according to "replace the business tax with a value-added tax". Tracing back to the backgrounds of "Replace the business tax with a value-added tax", it analyses the influences of tax changes, effects of deduction and changes in tax rates on the enterprises. The study shows that an increase of the tax rate "replace the business tax with a value-added tax" will have a negative impact on enterprise’s tax burden. When the increase of tax is larger, enterprise’s tax burden level also increases more. Enterprises mainly cover two aspects in input of tax deduction. On the one hand, it is the input tax on purchasing products or services, on the other hand, it is the amount of input tax in the purchase of fixed assets. The more tax deduction is, the more enterprises tax burden get. Take XX city as an example. it has examined the account of "replace the business tax with a value-added tax" in XX City in 2015 in pilot enterprises, reporting and tax warehousing situation etc. Besides, the tax effects of "replace the business tax with a value-added tax" in XX city on pilot enterprises, offsetting, finance, industrial structure and related constraints are analyzed. It is found that part of the industry tax did not fall up but rise. The same industry enterprise has rises and falls, The industry credit chain is not complete. Part of the enterprises are not fully deductible, wich affect the local finance income. In view of the problems above, it is advised to adjust tax rate of "replace the business tax with a value-added tax", expand the range of input VAT deduction and the scope of the pilot of "replace the business tax with a value-added tax", formulate reasonable, feasible and preferential tax policies of "replace the business tax with a value-added tax", adjust appropriately to the central and local’s distribution ratio and mode for the tax environment through the change of new managements.