Research On Abuse Of Preferential Tax Policies Under The Background Of Tax Cuts And Fee Reductions

Preferential tax policy is an arrangement for the government to reduce the tax liability of some certain groups to achieve specific policy objectives.In order to implement the preferential tax policy,within the existing institutional framework,it will be realized through the adjustment of statutory elements such as tax rate and tax base.Scientific and reasonable preferential tax policy can serve as a useful supplement to the "invisible hand" of the market,optimize the allocation of all kinds of resources and accelerate the flow of production factors in a much wider range,thus promoting industrial development and economic growth.Preferential tax policies usually have stronger modernity,purposeful and directivity,"tax cuts and fee reductions" is the current context of preferential tax policies exclusive expression with Chinese characteristics.In recent years,the international environment has become increasingly complex and severe pressure on the domestic economic downturn,China’s economy into the New Normal.The CPC and the State Council of PRC,taking into consideration the current situation,have put forward the five tasks of "three removal,one reduction,one improvement" and the strategic deployment of "six stability" and "six security".In this process,tax cuts and fee reduction policies,as important tools to "reduce costs" and "protect basic people’s livelihood and market entities",have given full play to their positive role in supply-side structural reform.According to statistics,from 2016 to 2019,a total of 5.1 trillion yuan additional tax cuts and fees reduction were made nationwide.In particular,the sudden outbreak of Covid-19 put large pressure on all major economies of the world in 2020.Chinese government implemented a series of preferential tax policies quickly for epidemic prevention and control to support enterprises’ rescue and resumption of work,effectively lightened the burden on enterprises.It also boosted markets’ confidence and helped the economy quickly go out of the crisis significantly.However,some taxpayers abuse preferential tax policies in various ways,which not only erodes the national tax revenue,but also distorts the policy orientation of tax cuts and fee reduction and undermines tax fairness.Among them,some are intentional non-compliance driven by interests,some are ignorance non-compliance caused by imperfect financial system and inadequate understanding of tax policies,and abuse caused by defects in system design.All the abuses bring huge risks to enterprise operation and economic development.Based on the introduction of preferential tax policies and tax risk management related theories and research trends,combined with daily work,this paper sorted out seven common methods of preferential tax policies abuse under the background of tax cuts and fee reduction by case analysis.Secondly,this paper makes an analysis of the risks and causes of policy abuse from three dimensions:beneficiaries(enterprises),regulators(tax authorities)and policymakers(legislative departments).Finally,this paper puts forward five suggestions on the risk prevention and control of the abuse of preferential tax policies in China,in order to promote abetter improvement of policies and achieve the final effect of tax policies.