Impact Of Sales Tax Reform VAT On China's Tax Burden And Enterprise Value Of Transportation Industry

The reform program to replace Business Tax with Value-Added Tax,the very important decision made by Chinese Party Central Committee and the State Council,is formulated on the basis of the new situation of the economic development and the requirement of deepening of the reform.The purposes of the reform are to speed up the fiscal reform,reduce the segments of duplicated taxation,further release the tax burden of the companies and facilitate the economic development.The Pilot Proposals for the Change from Business Tax to Value-Added Tax was approved by the State Council in 2011.The launch of the Business Tax("BT")to Value-Added Tax("VAT")Transformation Pilot Program("Pilot Program")for the transportation industry and certain modern service industries in Shanghai has been effective from 1 January 2012,which means that the reform program is launched.The reform program to replace Business Tax with Value-Added Tax has been expanded nationwide from May 1st,2016,after further roll-out of the VAT Transformation Pilot Program.The Business Tax is abolished.It has been five years that the Pilot Program for the transportation industry was effective.The implementation effects are gradually revealed.This thesis calculates and analyzes the difference of the tax burden of the listed companies in the transportation industry with BT and VAT,by using quantitative analysis and qualitative analysis.The deduction input tax rates to analyze are four rates,which are 70%,60%,50%,30%.The research finds out that the total tax burden and tax burden of turnover tax of the listed companies after the reform are more and more less than those before the reform program with the increasing deduction rate of variable costs.But the tax burden of business income tax is on the contrary.The total tax burden of the companies will be decreased when the deduction rate is over 60%.The research also finds out that all of the deduction rates from 2013 are over 70%.The research proves that the reform program to replace Business Tax with Value-Added Tax can reduce the tax burden of the companies.This article also demonstrates the impact on the companies' value with the change of the tax burden of seventy listed companies from 2013 to 2016.The demonstration shows that the reform reduces the tax burden of the companies and improves the companies' value.According to the research results,this thesis gives several suggestions to improve the companies' value and advance the development of transportation industry.Those suggestions are clarifying reasonable tax rate of all segments,actively pushing forward the electronic invoice and further improving the reform policies for transportation industry.