The Effect Of Replacement Of Business Tax By VAT On Enterprise Investment

The tax system reform began to pilot in China in 1994,and formed the basic pattern of value-added tax and business tax in parallel.It was a tax system compatible with the economic development level of our country at that time.As society developed,economy prospered and social division of labor was promoted,however,it carried the problem of double taxation,restricted the upgrade and optimization of the industrial structure,and also reduced the tax collection efficiency of the tax supervision department.To expand the scope of VAT deduction,maintenance taxation neutral principle,and promote structural tax cuts.China began to practice VAT Pilot Expansion Program on January 1,2012,which had been expanded to all industries on May 1,2016.Firstly,the article briefly introduced the background and the content of VAT pilot policy,reviewed the relevant literatures and theories from the perspective of tax burden and investment,which mainly includes the impact of tax on enterprise investment,the impact of VAT pilot expansion policy on enterprise tax burden,and the impact of VAT pilot expansion policy on enterprise investment.On this basis,the research hypotheses were put forth.In the empirical part,based on annual data of 119 A-share listed companies during 2010 and 2013,and quar;terly data of 103 A-share listed companies during the first quarter of 2010 and the second quarter of 2013,this paper introduced a policy dummy variable,and used DID model to study the impact of VAT pilot expansion policy on enterprise investment.The conclusions of this paper were as follows:(1)In general,the policy effect of VAT pilot expansion policy has taken effect.The policy has promoted the investment of listed companies to some extent,but it has no significant effect on investment in fixed assets and intangible assets.(2)In terms of industry,the promoting effect of VAT pilot expansion policy on Modern services enterprise investment is confirmed,while the short-term effect on the transportation sector investment is not obvious.The long-term policy effect of transportation industry remains to be seen.Finally,this paper put forward some policy suggestions:the government departments should continue to improve the details of tax reform,promote the fairness of tax burden among different enterprises and industries and simplify tax rates to extend the benefits of tax reform.