Vat Law Reform In Transition A Number Of Issues Discussed

Transition of the VAT (Value-added Tax) law is a new challenge in the reform of Chinese tax system after the tax reform of unifying the income tax imposed on the domestic enterprises and the foreign ones. In the view of tax law, the paper studies the drawbacks of the present system of Chinese production VAT law and analyze the necessity of the transition of VAT law system, with the method of comparison, law-and economics, the historical analysis; secondly analyzes the feasibility on the transition of the VAT law from the production type to the consumptive one in such aspects as the fiscal enduring ability, the economic adaptability and the level of tax levying and supervising activities; finally put forwards several specific solutions to the transition reform based on the design of transition plan and the matching methods. The paper is divided into three parts as follows:Chapter One mainly analyses the reform necessity of the transition of VAT law. Firstly, the author respectively introduces the VAT concept of each type: the production VAT, the revenue VAT and the consumption VAT, has the three types compared and contrasted detailedly, concludes evolution of Chinese VAT law, analyzes reasons that our country chose the production VAT type in the 1994 tax system reform; then, the author focuses the disadvantage and negative impact of production VAT—the system disfigurement of overlapped taxation, analyses the lacunas and limitations in such aspects as the taxation subject, the collection scope, the tax rates, the collection administration mode in our country's existing tax law of production VAT.Chapter Two analyses the reform feasibility of the transition of VAT law. Firstly, some brief introductions are given about practices of choosing VAT law types in some foreign countries, prominently analyzing different views on the choice of VAT law type during the transition reform in China; through considering foreign experiences and studying domestic situations, the author points out that, the consumption VAT type is the best choice during the tax law transition reform in our country; next, the author takes three points to demonstrate the transition feasibility of the VAT law from production type to consumption one: the financial durability, economic adaptability and the level of tax collection administration.Chapter Three puts forward some specific measures to the VAT law transition reform. This chapter is divided into two parts: the first part focuses on two issues in the transition plan, pointing out that, the transition movement shall be overall and to be expanded throughout the whole country as soon as possible, and that the deduction method shall be a fully-deducted one; the second part studies the matching measures to the transition reform in four aspects: the reform of the taxation subject, the reform of the collection scope, the reform of taxation rates and the reform of the collection administration mode.