The Promoted Effect Of The Replacement Of Business Tax By VAT On Specialized Labor Division

According to the Tax Neutrality Theory,the value-added tax(VAT)is more equal in the tax burden,as well as promoting the specialization division of labor based on enterprises,finally improving the economic efficiency.With the replacement of business tax by VAT policy implemented which can be seen as a natural experiment,the theory of tax neutrality can be tested as a basic tenet.As the priorities of the fiscal and tax reform,the policy of "replacing business tax with VAT" can solve the repeated taxation problems result fromthe two tax parallel executed structure,ultimately contribute to the formation of Specialized labor division.Shanghai,as the first pilot cities,put the reform of "replacing business tax with VAT" into effect since 2012,from then on,the VAT extend field swift and violent no matter in the reform time or in the pilot space.The whole country carries out the "1+6" industries? policy in 2013,and develop to the newly "3+7" industries?,eventually expanded to the "four sectors"(industries of construction,real estates,finance and life services)reform taken place in May 2016.In recent years,the research began to pay attention to the micro effect of the reform of "replacing business tax with VAT".However,empirical analysis which is to promote the effect of specialization based on econometrics model using experienced data,is not enough.Guangdong province has become the "natural experimental zone"for "replacing business tax with VAT" since November 2012.Until to 2016,before the expansion of the whole industries,the policy effect of "replacing business tax with VAT",practicing in the first batch of pilot industries has been gradually revealed.This paper cites an Industrial restructuring case from a group company in the industry of equipment manufacturing to analyst the deepening effect mechanism worked on the division of labor after the "replacing business tax with VAT" policy operated,and then taking use of the panel data of companies from tax investigation in Guangdong Province during 2010-2015 by different-in-different model(DID)to examine the promotion effect of the reform of "replacing business tax with VAT" on the division effect of specialization at enterprise level.Regression results revealed two possible results on the basis of DID model:first,on the one hand,we found that they expand the scale of pilot services,while the results may be more likely to purchase more R&D technical services and advertising services,instead of increasing the demand of traffic logistics services and advisory services.On the other hand,the pilot service enterprises obviously benefited from the "replacing business tax with VAT"policy which is the presentation of specialized labor division among enterprise.,as they got the volume of sales up with the upstream and downstream manufacturing industries,that turned out as the two-way effect of the corresponding outsourcing business predicted.Meantime,a heterogeneity analysis also further refined the conclusion,that is:the division effect to R&D technical service industry which with R&D advantage is more obvious than that of cultural consulting service industry.The scope of business of listed companies(manufacturing)within the pilot services,while the purpose of providing productive services changed from original self-sufficiency to marketing.As for the robustness test,by adjusting the time window and choosing the known control groups as the treatment groups,the placebo of the test is expected to be zero estimates.In order to make the conclusion more reliable,this paper also uses the Propensity score matching Method based on the double difference model to do the regression analysis for further testing the hypothesis proposed in this paper,and the result is still in line with the expectation.The main purpose of this paper is to validate the original intention of the policy,that is the division of labor effect comes from the existing empirical datas.Around the views of improving specialized labor division among enterprise,we can make some suggests about how to optimize the policy of "replacing business tax with VAT",from the policy-making level,the tax management level and the enterprise's own development level,and reach the purpose of improving the efficiency of tax collection and management,stabilizing the sources of tax revenue and promoting the coordinated development of the economy.