Research On The Optimization Of China’s Tax System

After the founding of China,the direct tax has a higher proportion in the tax system than the indirect tax.However the indirect tax has gradually increases the proportion in the tax system and then the indirect tax has a higher proportion than the direct tax.Since 1994,China government has established a tax system with indirect tax as a major structure.Recently,there are policies about "Structural Tax Reduction" and "Stable tax burden",so that the indirect tax as a major tax structure can’t^be suitable for our economy development.Indirect tax has a negative impacts on the allocation of the social resources and development of the company in the future.Also the lower proportion of direct tax can’t control the income sources of the high-income individuals and enterprises.Therefore our article analyze the tax system in the future based on the national income,the current economic conditions and other factors.Our article also puts forward the suggestions towards to the reform of the tax structure.This article first defines the distinction between the direct tax and the indirect tax,analyze the advantages and disadvantages in the mechanism.According to the definition,we study the our current tax system with the proportion of the direct tax and the indirect tax.In order to analyze the tax system in China,this article analyze the process of our tax system changing since our country founds,especially since the 1994 tax system reform,as well as the percentage changing of each tax category in the overall tax burden.So that we could make sure the tax structure reform which our tax system needs to be optimized and improved.In fact,different countries in the world have different national tax systems.When we analyze the tax systems in different countries and the relationships between tax systems and countries’ conditions,we find that developed countries were dominated by the direct tax and developing countries were dominated by indirect tax.And the tax systems in different countries are closely related to the degree of legalization,industrialization,the level of national income and other factors.Through the analysis,we make sure that China’s tax system need to be reformed immediately.However we still need to consider our policies and economic conditions.We believe that as long as the specific tax system can be improved,the level of tax collection and management in our country can be improved.our country’s tax system will inevitably present a reasonably optimized relationship of the direct tax and the indirect tax.