Research On Horizontal Transfer Of VAT And Its Effects In China

In recent years,fiscal disparities among local governments in China have gradually increased,which has affected the balanced development of regions.In fact,the difference in VAT income between regions is one of the important factors that affect the difference in regional fiscal revenue.Since the reform of the tax-sharing system in 1994,China’s value-added tax has been implementing a horizontal distribution mechanism based on the principle of production place.The benefits of this mechanism are simple calculation and convenient collection and management,but objectively it has also caused an unreasonable transfer of financial resources between regions.How much is the degree of this transfer,and how much impact has it had on the economic development between regions?Due to measurement technology and other reasons,the discussion on the above issues is mainly based on a qualitative level,without quantitative analysis.As a result,it is impossible to promote the implementation of relevant policy reform pilots.To solve the problems above,this article builds an analysis framework based on the global value chain accounting method and the computable general equilibrium model(CGE model),and analyzes the scale of the horizontal transfer of China’s valueadded tax under the principle of production place,the economic effects caused,and the design of the horizontal equilibrium optimization scheme.In-depth discussion of the problem,and strive to draw conclusions without loss of generality.Firstly,this article builds a model for the horizontal transfer of value-added tax between regions in China based on the global value chain theoretical value-added trade accounting method,and accurately measures the scale of the horizontal transfer of value-added tax between regions in that year based on the 2017 input-output table and other data;secondly,based on this,build a CGE model for China’s multi-regional tax-sharing system(MRTS-CGE model),and further analyze the theoretical impact of the shift from the principle of production place to the principle of consumption place;finally,design a balanced optimization plan for the three links of the horizontal tax transfer of value-added tax,and consider at the same time In recent years,China’s value-added tax reform has mainly focused on degenerate tax rate reforms.Three possible horizontal equilibrium optimization schemes for value-added tax is going to be designed,and each scheme will be evaluated and selected under different reform intensity and tax rate grades.The main conclusions of this article include:(1)There is a relatively serious problem of horizontal transfer of value-added tax in China,and the regional distribution presents a typical reverse distribution characteristic.Specifically,the total scale of horizontal transfer of value-added tax in China in 2017 was as high as 851.5 billion yuan,accounting for 40.8%of actual valueadded tax revenue.The scale of horizontal transfer in different regions varies greatly.The net tax inflow areas are mainly concentrated in the eastern coastal provinces.The outflow areas are mainly central and western provinces.Moreover,there are horizontal transfer problems in all aspects of value-added tax.The scale of horizontal transfer of value-added tax between domestic links and import and export links in various regions is roughly the same.The latter is about 70%to 130%of the former,which shows that the horizontal transfer of value-added tax in various regions The scale is not only related to the domestic trade structure of the region,but also has a greater relationship with the import and export structure of the region.If it is not considered at the same time,it will cause a systematic underestimation.(2)The horizontal transfer of VAT has both positive and negative effects on the overall economy,and negative effects on the balanced development of the region.First of all,in terms of overall economic effects,the horizontal transfer issue has a relatively weak overall impact on the country’s GDP,residents’ welfare,and consumption levels,but it is more obvious for specific industries.For the added value of the tertiary industry,the scale of imports and exports,and fiscal revenues at all levels There is a positive growth effect of 0.17%-0.6%,and a negative weakening effect of 0.16%-0.52%on the added value of the primary industry,total social investment and trade surplus.Secondly,in terms of regional economic effects,this problem has a positive economic impact on the regions with net tax inflows,but it has a negative economic impact on regions with net tax outflows.Specifically,as the net tax inflow has brought more local financial resources to the local area,fiscal revenue has a growth effect of 4.76%,which stimulates a 0.59%increase in the nominal GDP of the region,further improves the welfare level of local residents by 0.88%,and promotes 0.9%of the income.Social investment,0.37%export activity and 0.58%import activity.Among the three net tax outflow regions,the northeast region was the most negatively affected,with a decline in fiscal revenue of 6.1%,followed by the central region,and the western region was relatively less affected by a decline of only 0.56%.(3)This article proposes three reform optimization plans to promote the horizontal balance of value-added tax,namely,the domestic balance plan,the import and export balance plan,and the comprehensive balance plan.The study found that the most ideal horizontal equilibrium plan without changing the existing tax rate is a comprehensive equilibrium plan;in the case of a degenerate tax rate,whether it is a two-tier tax rate or a one-tier tax rate,the optimal horizontal balance is The schemes are all domestically balanced schemes;the implementation of incomplete reforms of the consumption area principle should be avoided as much as possible.