A Study On The Incentive Effect Of Tax Expenditure On High-Tech Industry Development

Development of the high-tech industry is an important measure for China to foster new economic growth points, realize industrial upgrading and updating, and ensure stable growth and sustained development of the national economy on a right track. As is known, the high-tech industry has the features of high infusion, high risk and high yield. The support from the national macropolicy is essential to the industry over the whole process from its formation and maturation to development. Tax expenditure, as an important means exerted by the government for macro economic control, plays an important role in accelerating development of the high-tech industry.This paper uses the real diagnosis analytic method and the standard analytic method to conduct the research of tax expenditure what encourage the development of high-tech industry. The key point of the research is whether the tax expenditure encourages the development of Hubei high-tech industry and how much does the incentive effect have. Then, the paper proposes the policy suggest to the goal of encouraging high-tech industry development. This paper discusses the problem from the follow aspects:1. The definition and development of the concept of high-tech industry. This paper clarifies the concept of high-tech and high-tech industry firstly, and focuses on inducing the development of the concept of high-tech industry from 1986 to 2008, and then lists eight areas of technology and thirty nine technical sighs of high-tech industry in detail.2. The analysis of incentive effect which is the tax expenditure on the high-tech industry. This paper clarifies the externality of high-tech industry and the importance of the high-tech industry promoting the economic growth and the upgrading of industrial structure, which causes the government should intervene the development of high-tech industry. And then, it analyzes tax expenditure as a way of government intervention, how does it effect the high-tech industry.3. The situation of Hubei high-tech industry and tax expenditure. This paper proposes that Hubei has formed a high-tech industry group in which the electronic information industry plays a leading role, by analyzing the present situation of Hubei high-tech industry. This paper induces the tax expenditure policy of Hubei high-tech industry according to the《People's Republic of China Enterprise Income Tax Law》, and analyzes the tax burden of Hubei high-tech industry from the total and structure, and then arrives at a conclusion that the tax burden of Hubei high-tech industry is lower then Surrounding areas, but higher then the eastern region.4. The empirical study of OLS model. This paper builds the OLS model between tax expenditure and Hubei high-tech industry, and proves that the tax expenditure of turnover tax and corporate income tax has incentive effect to the Hubei high-tech industry, and the former bigger than the latter.5. The policy recommendation. According to the result of the empirical study, this paper proposes the improvement and consummation what is about perfecting present tax expenditure policy of Hubei, the using of tax expenditure policy and the improving of the tax environment. The proposes of perfecting the present tax expenditure policy is summarized from the follow aspect: recognizes the turnover incentives, expands the choice of tax expenditure; adjusts the preferential point of corporate income tax, promotes the attractive of corporate income tax expenditure to the loss-making enterprise; increases the tax preferential base of personal income tax, promotes the culture of the high-tech talent.