The Influence Of VAT Reform On Corporate Financial Performance

Tax system is always suited to a certain stage of national development conditions, the government through taxes to achieve its macroeconomic regulation and the purpose of organization revenue. The implementation of the tax system reform in 1994, in line with China's national conditions and economic development overheated fixed asset investment and eased the inflationary pressure, had a positive effect on the sound development of China's economy and has played an important role in financial reform. But in recent years China's economic situation has undergone great changes, after ten years of development, China's economic strength and financial capacity has been significantly improved, while China's export growth year after year, China's dependence on exports stronger than before, the main restricting of economic development at this stage are the lacking of demand and industrial structure upgrading slowly. Based on this economic situation, the VAT reform become one of the important objectives of economic reform, so China have introduced been VAT reform in six provinces in Northeast and Central China in 2004 and 2007, in 2008, sweeping the world's financial crisis,China's economic development has encountered unprecedented difficulties and challenges, the VAT reform's implementation has become more urgent. Therefore, at the end of 2008 China adjust the macro-control policies, including implement proactive fiscal policy and loose monetary policy to expand domestic demand, one of the most dramatic measures was implementing nationwide VAT policy. The reformis not identical with the pilot:a wider range,aboliting trade restrictions and reducing the small-scale taxpayers standards; offseting more thoroughly, eliminating incremental deduction limit; the tax system more standardized and reasonable, reducing the small-scale taxpayer's tax rate. after VAT had reformed more than two years, whether its policy effects has achieved the desired objectives, what's impact on the business activities, whether improving business performance, all of these become the goal of this study.This paper argues that the VAT reform will not only promote the expansion of domestic demand, but also reduce the tax burden on investment in fixed assets, promote fixed assets update and improve the technical level and improve our products'competitiveness in the international, transformation of economic growth way and improve the performance of enterprises in the long run.This paper on the basis of previous studies, combining empirical research and standardizing research, from the microscopic view analyze tax transformation's impact on corporate performance. The paper's introduction introduced the subject of the article, thesis research ideas and paper structure, and introduced the theory of value-added tax and VAT system transformation, prepared the analysis of theory behind, and then through normative research, analyzed VAT reform on firm performance, proved the VAT reform in China is beneficial to improve the operating performance of listed companies, and through empirical research methods, choosing Shenzhen A-share listed companies report data, using descriptive statistical analysis and regression analysis, further examine the impact of VAT reform on corporate performance.The results show that the value-added tax policy and firm performance has significant relationship, after the implementation of VAT reform earnings per share was increased, business performance was mproved significantly. The last part put forward policy recommendations with the reform of VAT to government and corporate.The innovation may exist in this article:Although domestic scholars research the VAT reform policy so much, but most of the research was macroeconomic research, the research on enterprise performance is not much, especially after the nationwide implementation of the VAT reform empirical research articles on enterprise performance is rare. VAT reform's has Implemented nationwidely two years, research of the impact of reform's implementation on the economic efficiency and the financel of enterprises is blank; this paper pick up manufacturing and electricity as sampl becuase the transformation have significant impact on these industries, collecting extensive data, combining empirical research with standardized research method to study the VAT reform's influence on economic efficiency and financial performance, and point out potential problems to reform and improve recommendations. The innovation of this article:(1)To prevent from the impact of the VAT reform pilot areas, the sample data excludes the listed companies in six provinces in central China and the three provinces in Northeast China to explicit the impact of implement VAT policies in 2009 on corporate performance more eminently.(2) variable in the interpretation of the VAT actual rate is released by the tax cash flow minus the of the business tax and surcharges, minus income tax expense in income statement divided by operating incomeInadequacies of this article:As my study level is limited, mathematical foundation is weak, statistical knowledge is lack, research methods may not be appropriate, the results may have Errors and can not achieve perfection.Because of limited of sample data (only collected one year data after transition), the results does not have a universal and scientific significance.