Research On The Taxes Burden Of Construction Industry

Tax burden is the core of the tax system. As a strong fulcrum of tax leverage used by the government, the index directly reflects the relationship between the distribution of benefits among the state, enterprises and individuals.China restructured it’s tax system in 1994. As the two pillars in the turnover taxes, VAT and business tax shoulder the important functions of raising revenues for governments. Depending on the nature of the business, most industries are divided into the range of value-added tax or business tax. Because VAT and business tax system are set up independently, there is no cross-field. Since many factors are different, such as the method of taxation, tax basis, the regulatory body and so on, the VAT deduction chain fracture in many industries that paying business tax, resulting in a serious double taxation phenomenon, leading the tax burden on some enterprises unfair and unreasonable, and hindering the development and upgrade of enterprises.As one of the pillar industries, construction has been applicable to business tax. In order to production and operations, construction companies have to purchase a large amount of raw materials from the enterprises that are applicable to VAT, which resulting disunity in its internal goods and services tax system. According to the current tax policy, the VAT enterprises or business tax enterprises should not deduct the already paid tax from each other, which breaks off the VAT deduction chain in the building business. According to the business tax policy, the construction industry has taken a full tax way, which makes the phenomenon of double taxation more obvious.China began the reform program to replace the business tax with a value-added tax in 2012. The reform started in some industries of some areas, and then expand to some industries across the country, and finally will cover complete industries to the whole country, which aimed at improving the system of turnover tax and replacing lagging business tax with a more advanced VAT. In 2016 government work report, China has made it clear: from May 1 this year, the industries of construction, real estate, financial services and consumer services will be included into the scope of VAT, and the government will ensure the tax burden not increase.Based on the above background, this paper firstly collate and summarize the research results about the tax burden of construction industry. Second, we summarize the connotation and theory about tax burden. Then, we look at the tax burden on the construction industry, using financial data of listed companies. Finally, we put forward some corresponding policy recommendations.