A Study On The Tax Expenditure And Its Management

Through departure from the basic tax system, tax expenditure , with the same nature of financial subsidy, is the favorable arrangement for tax payers in order to achieve certain political, economical or social purposes and should be taken into account in budget management. The theory of expenditure by tax is widely applied around the world. In China, it is one of the key programs of tax system reform to establish scientific and standard management system of tax expenditure.This article first introduces the origin, the development, the concept, the feature, the modes of tax expenditure as well as its breakthrough in contrast with traditional tax preference. Then, based on the analysis of the necessity, relevant policies and the characteristics of the present expenditure by tax system, based on the practice of the Fourth Branch of Changsha Local Tax Bureau and taking a certain cement plant as an instance, this article discusses the relevant policies, the characteristics, the deficiencies, the mode, the distribution and the performance of the present system of tax expenditure and concludes that the management of tax expenditure requires enhancement. Finally, this article put forward relevant principles and ideas to regulate tax expenditure: standard tax system to define tax expenditure, the choice of budget management categories and management mode, the evaluation of tax expenditure through data collection and cost estimation, and the employment of other relevant measures.