The Research Of The Transformation Effects And Perfection Of The Consumptuion-type VAT System In China

With the establishment of socialist market economic system and economic globalization, economic activities become more and more complex, economic agents become more diversified, technical means more intelligent, and thus the scientific of the tax policy put forward higher requirements.This paper analyzes the positive and negative effects of VAT, and use the latest data and policy for the support of the implementation of a comprehensive consumption-type VAT, the double impact to the enterprise and the government, as well as the problems in practice, theory with practice, then made some effective coping strategies.This paper analyzed the different characteristics of impact on the burden ratio of taxation, the adjustment of industrial framework and the export-import trading by the comparison of three different types of value-added taxes, by which a solid base was laid down for investigating the economic effects of consumption value-added tax. In addition, four aspects (demand for investment increase and technology advancing, demand for the balance of taxation burdens among different regions and industries, demand for the development of export-import trading, and demand for stability and sustainable development of the economy) were involved in examining the necessities for popularizing the impose of consumption value-added tax, together with the theoretical analysis, some critical problems arising from the implementation of consumption value-added tax were revealed, including its impact on government's fiscal revenues, the limits to taxation range, and the handling of relationships between central and local governments, etc.The main part lies in the analysis on economic effects, accompanied by the specific account of positive influence of consumption value-added tax, by which some aspects, such as the alleviation of taxation burdens of related industries, the stimulation of the upgrading and the strengthening of the investment in new technology, and its positive impact on national economy and fiscal revenues, were taken into the research in this article. Then, another perspective was taken to examine the negative effects on economic growth and the adjustment of industrial structure, which played a significant role in searching for the appropriate breakthrough points for the optimization of putting consumption value added tax in practice, by the renewal thinking of scientific deduction system and the susequent expansion of imposing areas value-added tax.Trough the above argument and analysis, this essay defined the core matter of the practice of the consumption-type VAT; suggestions and recommendations to cope the problems were also given below:Firstly, actualizing a complete consumption-type VAT by promoting a standard system, which means an effective VAT deduction mechanism system, is demanded, and the scope of this system is required to expand to a considerable size. Industries which provide services such as architecture installment, traffic transportation, finance insurance, must be brought into the range of the VAT taxation as far as possible. By implementing this strategy, a full scale proliferating influence of VAT taxation is expected, and VAT deduction will be applied thoroughly to the real estate; Secondly, some particular revolutions should be made to the VAT taxation. The ratio of incremental revenue between the central and local government must be altered for the purpose of higher efficiency. The ratio of the VAT income division also needs to be adjusted. The central and local financial system and tax power relations should be regulated after the expansion of VAT taxation, in order to establish a perfect VAT deduction chain, and implement the principle of the real tax.; Thirdly, some privilege policy were considered as redundant today, in order to reduce the negative effects of VAT taxation revolution, especially the negative effects on our financial incomes, these policy are required to be adjusted. Tax collection needs to be strengthened to guarantee a sufficient VAT taxation, while the threshold of VAT taxation for general taxpayer needs to be lowered, so that inequity for SMEs can be eliminated; Fourthly, revolution of investment and financing system should be accelerated to promote stable economic growth; Finally, the economic structure needs adjustments to improve economic efficiency and reduce financial dependence on the VAT.