Study On The Impact On Banking Tax Burden Caused By Changing From Business Tax To Value-Added Tax

To fit in with the needs of the society,China had implemented a circulation tax system in which both business tax and value added tax existed for a long time.Under this system,the government imposed business tax on selling real estate,provision of service and selling intangible assets,while selling goods and manufacturing were levied by value added tax.However,with the fast development of market economy and refining of division of labor based on specialization,the problem of duplicate taxation caused by incomplete VAT deduction chain was becoming increasingly serious.It had been costly for enterprises,especially during the moment of industrial transformation and upgrading.It is necessary to optimize and upgrade the industrial structure in the age of economic globalization.To perfect the finance and taxation system,unblock the VAT deduction chain for all industries,lower the burden of taxation and boost the innovation of supply of material,China started the change from BT to VAT in some industries and of a few districts,and expanded the pilot to construction industry,financial industry,daily service industry and real estate.BT had become history after October 30th,while VAT had covered all industries.Financial industry plays an irreplaceable role in economic operation as the lifeline of economic.Banking industry,as the core of financial system,supports the development of the real economy.Therefore,the success of change from BT to VAT in banking industry concerns the stabilization and development of financial industry,thus the transition and upgrading of real economy.Change from BT to VAT in banking industry faces a lot of problems due to the industrial characteristics.It is of realistic significance to solve these problems properly and ensure banking industry a smooth transition.This article looks into the influence that changing from BT to VAT could cause to banking industry,based on the financial data in 2016 of Bank of China.Through this study,we can learn the variation of tax burden of circulation tax and income tax.Finally,based on the summary of issues that banking industry could have during this change,this article gives some suggestion.