A Study On Tax Cost In China

Since the reform of tax in 1994, Chinese tax revenue has been greatly increased under the guidance of increase "the two proportion", which was put forward by system of tax distribution. So the governments at all levels have sufficient financial resources to develop economy, this is the cause of Chinese economy rapidly developed for more than 30 years. However, with the development of economy, Chinese tax reform relative lag, caused the collection of tax cost, pay of tax cost, economic cost and social cost is increasing sharply. The result is that the tax’s function of economic management is weakening. Under the background of the growth of the Chinese economic slow down and the requirements of "structural adjustment, promote the transformation", how to optimize China’s tax system and reduce tax cost became the key to comprehensively deepen reform and improve the quality of economic growth.Therefore, to study the tax cost problem of China, has important theoretical significance and practical value.Based on the combing and summary of related literature, this paper built the basic theoretical framework of tax costs, and divided the tax cost into the collection of tax cost, pay of tax cost, economic cost and social cost. Through the analysis on the four aspects of tax cost, and draw lessons from foreign experience, this paper improved the Suggestions of cut the high cost of Chinese tax. In this paper, the innovative work mainly includes the following:First, the article gave the difference definition on the economic cost and social cost of tax, and ranged the study of tax cost from the collection of tax cost, pay of tax cost,economic costs expanded to social costs. Through analysis and comparison of the four types of tax costs, it is concluded that the factors that affect the cost of all kinds of tax,so that we can draw a way to reduce tax cost.Second, by the method of vertical comparison and horizontal comparison, this paper studied the present situation of the collection of tax cost and pay of tax cost, then analyzed the common and special factors of the collection of tax cost and pay of tax cost. Due to the relationship of tax average costs and the collection of tax costs is u-shaped. Tax cost reduction does not mean that must be reduced to collect fees, we should analysis for every special problem: for example we must reform institution and reduce the collection of tax cost to cut the tax cost which was caused by the center and local taxation bureau, and we need to increase the intensity of tax audit, in order to reduce the tax cost which was caused by the tax evasion.Third, using the Barro’s thought, the paper estimated the economic costs of our country, analyzed the direct and indirect factors which affected the economic costs of tax, and carried on the empirical test. The result shows: the tax system structure, the tax burden is the direct factors affect the economic cost of tax, the low proportion of income tax, the tax burden is increasing tax in our country economic cost of the main causes of growing; Through the contrast of east area, central area and western area,we found that the backward area is more sensitive on tax system structure and the tax burden, so improving the structure of the tax system and reducing the tax burden is the key to the rise of the central region and the development of western area.Fourth, this paper used the entropy value method to estimated the revenue of Chinese social tax costs about the income gap, the environmental pollution and rising home prices, then analyzed the main factors which caused the social cost. The comprehensive indicators of tax social costs which constructed by entropy method showed that between 2004 and 2014 tax social costs increased by about 15%.Compared with the growth of economic cost, you can see the growth of social cost is low, but that doesn’t mean social tax cost is low, because the social costs have been high.Fifth, this paper drew on the advanced experience of in tax administration from the developed countries, pointed out that Chinese tax revenue management is insufficient on tax legislation, tax management system and tax environment.