The Study On Value-Added Tax Adjustment And Reform Of Resource-Based Regions In Western China

Value-added tax is one of China's main taxes. Based on the prevailing economic situation, China firstly proposed the transformation of value-added tax in Northeast China and then expanded to 6 provinces in central China, finally promulgated a new "Provisional Regulations on VAT" on January 1st,2009, which marked the turning to consumption-based VAT from production-based VAT.The VAT transformation reform has not also included offsetting real estate of fixed assets. Because this VAT system allows no flexibility, it has not caused any substantial change to the western regions with rich natural resources. In this kind of western regions, economy and taxation are still not coordinated and there exists prominent contradiction between resource-based industrial structure and VAT. All of these have been manifested in fast growth of VAT revenues, high proportion of VAT revenues and heavy tax burden in western regions. Moreover, the VAT tax burden of the western region, primarily processing agricultural and developing resource, is significantly higher than that of the eastern region, thus the imbalance of tax burden between the western region and the eastern coastal areas are widening.Therefore, the research and establishment of VAT policies are conducive to the improvement of the western industrial structure as well as to the comprehensive development of resource-based western region.Firstly, from the perspective of the conflict between the unified value-added tax law and the special conditions of the western region, this paper analyzes that the current VAT has great obstacle to the adjustment of economic structure in western region, furthermore the reasons such as differences between eastern and western regional economic development, the shortcoming of financial management system and the drawbacks of existing VAT and so on. Finally, it proposes solutions to solve the contradictory, including expanding the scope with the transformation of VAT, extending the collection chain as well as improving the financial management system and so on. It aims to promote overall socio-economic development of resource-based western region by providing VAT systems available to the improvement of industrial structure in western region.Above all, the research indicates that the principle measure to solve the conflict between the value-added tax law and the special conditions of the western region is to further the reform of VAT and to carry out "a thorough and through" VAT.