Analysis Of The Impact Of Business-to-VAT Reform On Residents' Consumption Structure

Resident consumption is the basic guarantee for the stable operation of the economy,its importance is self-evident.The total consumption of residents has been expanding,maintaining a steady and rapid growth in recent years.The fundamental role of consumption in economic development has been significantly enhanced.However,at the same time,there is also a problem of relative insufficient supply of effective and high-quality supply,the coexistence of overheating in foreign consumption and the overcapacity of domestic related industries.How to further promote the consumption structure of residents is the focus of the present and future work.Tax policy is one of the vital important macro-control means,having close relationship with consumption.It plays an important role in adjusting consumption structure,enhancing consumer willingness and promoting residents' sustainable consumption.Shanghai has launched the pilot work of "business-to-VAT reform " from January 1,2012.The business-to-VAT reform is one of the most important tax reform in recent years,involved in the two major taxes of turnover tax.It is a significant decision of the structural reform of supply-side.Therefore,the study of "business-to-VAT reform" on residents'consumption structure has great practical significance to promoting the expansion and upgrading of residents' consumption and cultivating new growth points.Firstly,this paper analyzes the general action mechanism of the transfer tax on the consumption of residents mainly from two aspects of "income effect" and "substitution effect".And This paper examines the internal economic logic between the business-to-VAT reform and the residents' consumption structure through systematic theoretical analysis drawing a flow chart of conduction mechanism,showing that the business-to-VAT reform is mainly based on five effects,tax reduction effect,price effect,employment effect,industrial adjustment effect and economic growth effect through three mechanisms to regulate the consumption structure.Then,through the comparison of the urban and rural consumption data both horizontally and vertically,this paper analyzes the current consumption status of the residents,and focuses on the restriction factors of the upgrading of the residents' consumption structure from the tax burden and the tax structure.Then,taking Shanghai's business-to-VAT reform as a sample,this paper makes an empirical analysis.Based on the time series data from 1995 to 2011 of Shanghai,setting up a multiple linear regression model of VAT,business tax and resident consumption structure before the pilot of business-to-VAT reform.Then use exponential smoothing method to empirically analyze the change of the residents'consumption structure before and after the VAT pilot reform.Conclusion shows that the business-to-VAT reform has reduced the proportion of food and clothing expenditure,and increased the proportion of medical care,traffic and communication,education,culture and entertainment services.It shows that Shanghai's business-to-VAT pilot reform has a positive impact on promoting the transformation of consumption structure from survival to enjoyment and development consumption.Finally,based on the theoretical analysis and empirical results,make suggestions for policy optimization,mainly from three aspects:first is to optimize the structure of the tax system and reduce the tax rate of VAT moderately;the second is to simplify the tax rate of VAT,reduce the tax burden on the necessities of life;and thirdly,expand new growth point and promote the consumption potential of the rural residents.