Research On The Impact Of VAT Rate Reduction On Corporate Operating Performanc

In order to further stimulate the vitality of enterprises in the current complex economic environment,China continues to promote the policy of tax reduction and fee reduction,with the latest VAT rate cut being implemented from 1 April 2019.In this downward adjustment,the VAT rate was reduced from 16% to 13% and 10% to9%,while 6% remained unchanged,resulting in a tax reduction of 800 billion yuan,a move that has attracted widespread attention in society and from which many enterprises have received very substantial tax reduction dividends.The study of the VAT rate reduction not only provides a way for the authorities to test the effect of the policy,but also lays the foundation for further deepening the reform,while enterprises can also adjust their development direction in a timely and effective manner,so it is meaningful to analyze the implementation effect of the policy and its impact on the business performance of enterprises.This paper presents the theoretical and current situation analysis after literature review,and not only proposes the transmission mechanism of the "price effect" and "tax effect" of VAT,but also summarises the policy effects achieved by the VAT rate reduction and the business performance of enterprises in different property rights and regions.The study focuses on the overall impact,heterogeneity and mediating effects of the VAT rate reduction on the business performance of firms,using the screened A-share listed companies in 2017-2020 as a sample and the VAT rate reduction policy implemented in 2019 as a natural experiment.Firstly,the basic test finds that the VAT rate reduction has a significant contribution to the business performance of enterprises;secondly,the different effects of the VAT rate reduction on the business performance of enterprises are verified from four heterogeneous perspectives: price elasticity of demand,VAT tax burden,nature of property rights and different regions,and it is concluded that the effect of the VAT rate reduction on the business performance of enterprises with high price elasticity of demand,high VAT tax burden,non-state ownership and western regions is more The effect of VAT rate reduction on the business performance of firms with high price elasticity of demand,high VAT burden,non-state owned and western regions is more significant.Thirdly,it is further found that VAT rate reduction can promote the business performance of firms through two mediators: increased R&D investment and cash flow.Finally,based on the empirical findings,recommendations are made from the perspectives of both enterprises and the government to further optimise the VAT rate structure,make use of intelligent means,actively promote innovation and rational use of tax reduction bonus.These recommendations are of great practical significance for the government to further implement relevant tax policies,improve the level of collection and administration,and for enterprises to make reasonable tax planning and improve their business performance.