The Effect Of Transformation Of VAT Type On Jiangxi's Manufacturing Industry

Premier Wen Jiabao held in the executive meeting in November in 2008 that to expand domestic demand and reduce tax burden of enterprises'equipment investment and promote technological progress of enterprises and industrial structure adjustment and transit economic growth mode, decided to pursue the reform of the VAT in our country all regions and the each profession applies since 2009. Considered and adopted three bills:"Provisional Regulations on Value Added Tax of the PRC (Revised Draft)',"Provisional Regulations on Consumption Tax of the PRC (Revised Draft)" and "Provisional Regulations on Business Tax of the PRC(Revised Draft)" Jiangxi Province is one of the central province. This policy inevitably influenced the burden of the VAT and business income taxes and investment in fixed assets in various industries in Jiangxi. This paper made use of the basic principles of Economics,Taxation and Investment Principles and other disciplines, adopted the research methods of combining quantitative and qualitative research, combining theory with practice, and combining tax policy and tax administration. In addition, Based on the financial dates of 23 listed companies in Jiangxi, this paper set up the model and actively explored the effect of transformation of VAT type on the tax burden and the investment in fixed assets of Jiangxi's manufacturing industry.This paper is divided into four parts:The first part, Prolegomena. Firstly illustrated background and significance, then based on retrospect and evaluation of research situation at home and abroad, as to the actual situation of Jiangxi province, built research methods and basic framework of this paper, meanwhile pointed out its innovations and deficiencies.The second part, theoretical analysis of the effect of transformation of VAT type on manufacturing enterprises. In aspect of tax burden, Main analyses the effect of transition of VAT type on VAT,urban maintenance and construction tax,the additional cost of education and income tax of manufacturing enterprise. In aspect of investment in the fixed assets, study the effect of transformation of VAT type on fixed assets investment from its return and risk capital.The third part, empirical research about influences that are brought by the transition of VAT type to tax burden of manufacturing enterprises and investment in the fixed assets. Make use of relevant dates about 23 listed companies in Jiangxi, Quantitative analysis about influences in tax burden which are from the VAT and actual income of manufactures in Jiangxi, Further empirical research about influences that are brought by transition of VAT type to investment of enterprise fixed assets.The fourth part, After the reform of VAT, the new VAT policy existed some problems and policy recommendations. Combination of the foregoing analysis showed that the VAT transformation can bring about the negative impact, such as not conducive to the manufacturing industry to enhance technological innovation, restricting the transportation industry to promote economic development, hindering accelerated development of small and medium enterprises; "Investment soft constraints" will reduce the effect of the reform of VAT, etc., and proposed a series of measures and recommendations.This paper argues that, in terms of tax burden of VAT, the transition of VAT could result in the reduction of tax burden of VAT on the manufacturing industry, which the resource processing and manufacturing reduce the maximum, followed by machinery and electronics manufacturing, textile manufacturing finished third. However, the impact of transition of VAT type has a lag, and the time of the reform is not long, so the effect was not fully revealed. This paper forecasted the manufacturing and resource processing machinery and electronics manufacturing industry should be relatively large gains. In terms of tax burden of the income tax, theoretically the transition of VAT type would raise income tax rates, but empirically the effect of transition of VAT type is not significant on the income tax burden of Jiangxi's manufacturing industry. Possible reasons were the following:①The impact of transition of VAT type has a lag, some factors was not fully revealed.②Sample size was limited, the choice of time period was not ideal.③Depreciation of fixed assets is not the only factor that affected corporate taxable income.④the total profits of an enterprise was also affected by non-subjective factors.⑤Preferential policies of business income tax offset to some extent the effect of the transition of VAT type. In terms of investment in fixed assets, the transition of VAT type could promote the fixed assets investment of corporations. Empirical analysis, No matter before and after transformation of VAT type, the investment in fixed assets was very much affected by pre-investment in fixed assets and the total assets. But with the transformation of in-depth, influence of both have been gradually weakened, while influence of the corporate cost of capital and VAT have been enhanced. The impact of income tax and total profit was not obvious.