Research On The Horizontal Transfer Of VAT Between Regions In China

As the largest turnover tax in China,value-added tax has a long history of collection and a wide range of collection,involving all regions and industries in China,and is an important contributor to the fiscal revenue of the Chinese government.The principle of VAT collection adopted in China has always been the principle of place of production,that is,the region in which the goods or services are produced VAT belongs to the place of production.Under this principle,production generates revenue for the government of the place of production,but consumption does not generate tax revenue for the government of the place of consumption.In the long run,resulting in the gap between the value-added tax tax of the place of production and the place of consumption,the economy of the place of production is becoming more and more developed,and the more tax revenue is generated,while the economy of the place of consumption is still backward,bearing most of the tax burden,so that the gap between local government tax revenue is too large,forming China’s current economic organization form with production as the core,but also bringing about problems such as unbalanced development between regions and uneven distribution of benefits.At present,most countries that collect VAT adopt the principle of place of consumption,and through foreign practice,this reform direction is conducive to narrowing the fiscal revenue gap between regions.Therefore,in order to solve these problems,we should start from a fundamental perspective,that is,the principle of place of production that leads to the problem of horizontal transfer of VAT,and take the principle of place of consumption as the premise to solve the problem of horizontal transfer of VAT,which is conducive to alleviating the government’s distorted behavior such as excessive investment and redundant construction in order to obtain tax revenue,mobilize local enthusiasm,and also help narrow the development gap between regions and promote the realization of coordinated regional economic development.At present,China only has the vertical distribution of VAT between the central government,and lacks a horizontal distribution system between local governments,so the study of the principle of consumption place is of great significance to improve China’s VAT collection system.The first part of this paper first determines the research objectives,and summarizes the horizontal distribution of VAT by domestic and foreign scholars to clarify the current research process of this issue.Then,the second part defines and sorts out the concepts and theories involved in the horizontal distribution of VAT,laying a theoretical foundation for the following article.The third part is to select consumption indicators under the principle of place of consumption,construct a formula for horizontal VAT transfer,measure the degree of horizontal VAT transfer between regions from 2010 to2020,and analyze the characteristics,so as to analyze the factors affecting the horizontal transfer of VAT.The fourth part analyzes the mechanism of horizontal VAT transfer on the basis of the third part,makes relevant assumptions,constructs a multiple regression model for empirical analysis,and studies show that the industrial structure,especially the more developed the secondary industry,the higher the degree of horizontal VAT transfer.The consumption level has a significant positive correlation effect on the horizontal transfer of VAT,while the number of population has a significantly negative impact on the lateral transfer of VAT,and it is concluded that the consumption level and population have an important impact on the lateral transfer of VAT.Next,the problem of horizontal VAT transfer due to different VAT rates is studied from a micro perspective.Finally,by understanding and sorting out the policies of countries that collect VAT internationally to solve the horizontal distribution of VAT,combined with China’s national conditions,it is proposed to combine the proportion of consumption level and population factors with the model of "collection of production +attribution of place of consumption",and improve the corresponding tax policies and other systems to effectively solve the problem of horizontal transfer of VAT between regions in China,so that the regional economy can develop in a coordinated manner and better implement the principles of fairness and efficiency.