A Study On Tax Harmony Across The Strait

Since the beginning of reform and opening to the outside world, the economy and trade communication across Taiwan Strait has become more and more popular. Following the entering into WTO both mainland China and Taiwan, the quality of economy and trade exchanges was improved, the quantity was increased, and so was the economy and trade relations across the strait under the WTO frame. Tax, as the most important income resource for government, has played an important role in the economy and trade communication across the strait. However, influenced by some factors in historical background, political culture and human resource environment, the communication between Taiwan government and Mainland government is lack, the problem of dual levy and tax evasion is obvious, and the function of tax preferential policies are limited. Moreover, the tax system across strait is set according to their individual law and regulations, which leads to great difference. For the tax policies are established in different tropisms, there are lots of conflicts. The whole tendency of the economic development, such as the appeal to the free-trade area or common market across the strait, requires a uniform tax system and consistent tax policies. However, the present economic and political situations across the strait in practice decide the hardness of tax combination across strait. Therefore, the tax harmony across strait, needs to consult in either the experience of other economic regions, or the history and present situation across the strait. The tax treaty and tax harmony should be combined appropriately, for it's meaningful, in both economy and polity, in improving the development of economic and trade cooperation across strait.Considering all the above, this thesis researches further in the feasibility and necessity of tax harmony across strait in the aspects of theory and practice, on the basis of the previous studies. It includes the theory basis on the tax harmony across strait, the present situation of the economy and trade development and tax relations, the difference of tax systems and tax policies across strait, the problem to be solved in the tax harmony across strait, etc. The highlight of this article is the application of Hamada Model to the analysis in the theoretical necessity of tax harmony across strait. The innovation establishes a firm theory base from the aspect of game theory. Furthermore, this article uses the practices of some Economic Cooperation Zones inside and outside of our country, pays attention to the present situation and future development of cross-strait, and offers the principle, step and workable measures for the improvement of tax harmony across strait.In a word, this article is aiming at not only summing up the previous studies, but also adding to their lack and making the best effort to promote the development of tax harmony across strait.