Analysis On Improvement Of Tax Incentives Policy

As China's market economy further improved, we must also emphasize the importance of government intervention in the economy, when satisfying the basis allocation function of the market on the economic resources. Tax incentives are the important control means for government to correct market failures, adjusting the economic structure and achieving coordinated development of socio-economic. As we known, tax incentives are government behavior, so it should be subjected by the supervision authority and be ensured its legitimacy in policy formulation and implementation. That is the formulation of policy must be law and the procedures established and the implementation of the policy must be carried out according to law. This is the proper meaning of building the legal tax system. But tax incentives are unique, such as tax incentives own strong economic purposes and instability. That is the reason why tax incentives system should be special treatment in the building of the legal system.Tax incentives, as the macroeconomic control means in specific economic situation, are the ones which through the form of giving up the state's financial income to take care of the economic projects which are needed to be encouraged and supported to achieve a certain economic purpose. This determines that tax incentives policies, in addition to be legitimate in the process of formulation and implementation, must also ensure the implementation of policies can achieve the economic goals. So in practice, even if the processes of formulating and implementing policies are legitimate, the policies are also failure because of the implementation can not match the expectations of the economic purpose. So, in order to avoid such situation, the feasibility of the policies should be demonstrated. And the policies' effect should be objective evaluated timely after. However, there are not any policies implementation assessment systems of tax incentives to be established, so the effects of tax incentives are often be subjective exaggerated by the government, and be questioned by the public. Therefore, building the legal system of tax incentives include not only the formulation and implementation of the policies, but also the building of the policy performance evaluation system. That can evaluate the effect of the tax incentives. Moreover, the formulation and implementation of the policies can have a practical significance only after the objective evaluation system can satisfy the effectiveness of the policies. And only in this way can us truly to make the tax incentives into the management of the legal system.For the above reasons, firstly, this paper analyzes the problems of tax incentives system in nowadays China, and points out the nature reasons of these problems. Secondly, the paper points out that performance evaluation system of tax incentives policy are very important for legal building of the tax incentives system. Finally, the paper introduces the views of tax-expenditure management and makes some constructive proposals.