Research On The Tax Burden Of China's Banking Industry

China's long-term tax system and tax policy are the most important factors that influence the tax burden in China's banking industry.As replacing Business tax with VAT is expanding to the financial sector and the tax burden of banks will change as well.This paper analyzes the overall tax burden level on a sales tax on banking and the overall tax burden after VAT is calculated.The analysis shows that on the basis of the premise of tax deduction,replacing Business tax with VAT will reduce the tax burden level of banks.Moreover,in order to maintain stability of the tax burden,we need to select appropriate tax rate.China's banking tax system has many problems.Double taxation and unreasonable tax preferential policies has existed in Business tax and the banking tax burden is heavier.At the same time,the banks will face many difficulties in VAT,such as selecting tax rate,collecting methods,level of input tax deduction and tax changes.In terms of income tax,tax rate adjustment and the preferential tax policy orientation deficiencies and other issues are existed.The reform of bank system in China can draw lessons from the advanced experience of foreign financial tax policy.Business tax can be replaced by VAT and a banking tax system of income can be gradually established.Therefore,we need to promote the healthy development of banking,make banking tax burden level stable,reasonable value added tax,strengthen the compliance of value added tax collection and administration,and standardize enterprise income tax preferential tax.In addition,the government should establish scientific tax source monitoring system,strengthen banking tax assessment,do a good job of tax policy propaganda,improve tax collection and management of banks.