Research On The Fiscal And Tax Policies Of The Agro-industry In China

The development of the agro-industry is the strategy focus for the promoting of algriculture industrialization management and the economic reconstruction of the rural areas. It is also the necessary procedure of joining together the small-scale agriculture production and the modern production. Furthermore, it is the key solution to the problems of agriculture products selling, agricultural efficiency improving and rural incomes increasing. The development of the agro-industry in China is still in the primary stage. The gap with that of the developed countries is relatively wide. It can be affected by many factors, such as raw materials, labor resources and economic policies. Among various of economic policies, fiscal policies are of the most importance and of the most power. In recent years, the Chinese government has attached considerable importance to the rapid development and the structural adjustment of the agro-industry, which will be taken as a very important subject to promote agricultural and rural economic development and strategic restructuring of the national economy. Although several fiscal preferential policies have been promulgated, the current fiscal policies are still unable to fully reflect the strong support of the government to the development of the agro-industry. In addition, there is a great gap between the fiscal policies of China and that of other countries. Hence, the need to adjust and improve supportive fiscal policies of the the agro-industry is urgent.In this thesis, we explore the fiscal policies which were derived to promote the the agro-industry in China. Firstly we conclude the fiscal policy development process and the current difficulties of the agro-industry in China. Then we extract the experience in fiscal policies from the agro-industry developments of the developed countries like U.S., EU, Japan and South Korea. Finally based on the basic finance and tax theories and the methodologies of normative analysis, empirical analysis and comparative analysis, we discuss the current situation and existing problems of the agro-industry fiscal policies and propose several measures the government should take to adjust and improve the fiscal policies in the agro-industry.The main conclusions of this paper are summarized as follows:First, there is a theoretical and practical basis on the use of fiscal policy to support the development of China's agricultural products processing. Unbalanced growth theory, priority to the development of leading sectors, the development pole theory and the supply-side views provide a theoretical basis for the tax to support the rapid development of agricultural products processing; China's agricultural products processing's position in the national economy as well as a huge gap between advanced countries make taxation policy support seems particularly urgent and necessary.Second, the effects of fiscal policy support has emerged, China's "Eleventh Five-Year" period, agricultural products processing has been rapid development, its average annual growth rate reached 15% ,is 2 times of the rate of economic growth at the same period. However, faced with the problems of agricultural products processing, it is necessary to adjust and improve the means of fiscal support, the ways of support and the intensity of support for our country.Third, China's current fiscal policy can be divided into financial investment policies, financial subsidies, and credit policy and tax incentives four areas. After analysis, current fiscal policy measures, achieved some results, but there are some problems, such as fiscal support system has not been formed, effects of existing policies did not fully play, financial investment is insufficient, financial subsidies is not reasonable , lack of tax incentives and so on. Therefore, improve the policy has become a necessity.Fourth, the experience from developed countries shows that, in order to promote the development of agro-industries, they use a variety of fiscal policy instruments: vigorously pursue financial investment, provide significant financial subsidies, provide sound financial services and tilting of the tax policy. With the changes of social and economic environment, these policy tools adjust accordingly. It is the sound fiscal policy support system that leads to the rapid development of agricultural products processing.Fifth, from the empirical analysis, the positive effect of the implementation of fiscal policies is very clear: First, the indicators that measure the degree of development of agricultural products processing have a substantial increase ,which leads to the rapid development of agro-industry; Secondly, to some extent government subsidies, tax incentives improve the profitability of the business; Once again, China's agro-industrial development promote the development of the rural economy, economic restructuring of agriculture and farmers increase income substantially.Sixth, based on the development process of fiscal support for agricultural products processing and practical experience of promoting agricultural products processing development, our government should increase financial input for further efforts and explore new means of support, improve the financial subsidy in complying under WTO principles, and expand credit support tools in time, and further improve the existing preferential tax policies to make China's agricultural products processing catch up with advanced countries level of development in a short time.