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Studies On Tax Institutions Oriented Towards The Development Of SMES

Posted on:2015-01-12Degree:DoctorType:Dissertation
Country:ChinaCandidate:X P JiangFull Text:PDF
GTID:1109330461474320Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
Small and medium-sized enterprises (i.e. SMEs) always play an important role, whether in the present situation or in the nation’s long-term development. But in reality, the environment for their development is not satisfying and especially fund shortage is the key bottleneck for their development. Does the current tax system hinder the development of these enterprises? If so, what measures should be taken to change the situation and ensure government implement service to small and medium-sized enterprises.Firstly, the paper discusses the current tax system and its impact on the development of Chinese SMEs. Conceptually defining the scope of SMEs and stating the status of SMEs in China’s national economy and its development predicament, the paper introduces the vital influence of tax system on the development of SMEs and the meaning of tax system as well as its structure. With a brief description of the possible impact of the tax system for SMEs, the paper briefly summarizes the disadvantages of the current tax system to the development of SMEs, mainly resulting from the unreasonable tax structure, i.e. the proportion of direct and indirect taxes, which paves way for introduction of a new theory of tax collection.Secondly, a new theory for tax collection is put forward, namely Theory of shareholder’s returns. Based on the presentation, summary and brief comment of the theories of tax collection, it is found that they are unsuitable for China’s condition and hence puts forward a new theory of tax collection called theory of shareholder’s returns. Moreover, the theory’s definition and connotation explained, the paper probes into its possible impact, especially on the development. That is to say, the tax system designed according to theory of shareholder’s returns will make the interests of government and enterprises meet together, which promotes government to provide better services for SMEs proactively to solve the development problems.Then, applying to game theory and the principal-agent theory model in information economics, it discusses the interests unity of government and enterprises based on theory of shareholder’s returns. With enterprises as principals and government as agent for stockholder by providing services (government acting as stockholder and agent simultaneously), the objects of both are considered in the research model so as to probe into the incentives of the value-added tax and enterprise income tax, finally achieving a Nash equilibrium. The main conclusions are as follows:(1) the level of incentives of income tax on government is no less than that of the value-added tax. (2) Relative to the value-added tax, income tax can enable the government to create convenient conditions for the development in a higher level. (3) The expected net profit of enterprises is connected with the degree of risk aversion of the government:the rise of the former following the decline of the latter. So government should to undertake part of the risk of the enterprise, for the sake of long-term development and increase of net profit of the enterprises as well as the long steady increase of government finance. (4) Compared with the value-added tax, enterprise income tax can help achieve the profit maxim of enterprises and government.Finally, the empirical study is resorted to explain the relationship of the tax structure and the development of SMEs and prove the opinion of interest unity of government and enterprises. By using the panel data of 2005-2010 data for SMEs in China, the paper adopts the fixed effect model empirically to study the relationship between the tax structure with the development of SMEs. it is found that (1) the positive influence of direct taxes on the SMEs outweigh that of indirect taxes, which means direct taxes are more conducive to the growth of the SMEs scale. (2) With the expansion of the scale of SMEs, direct taxes contribute more to the increase of government income from enterprises’taxes than indirect taxes. (3)Compared with labor input, insufficient capital investment is a serious constraint to the development of SMEs. It is beneficial to enlarge capital investment in the SMEs. (4) The ratio of capital cost is given a large coefficient, which indicates it is an important constraint for SMEs scale and the enterprises are encountered with higher financing cost or difficulties of financing.
Keywords/Search Tags:Small and medium-sized enterprises, Tax system, Theory of shareholder’s returns, Interest unity of government and enterprise
PDF Full Text Request
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