Research On Perfecting VAT That Supports Agriculture

Agriculture is one country's base as a key industry. The price of agriculture products is the most important criterion in the whole agriculture system, because it affects the peasant's income, produce enthusiasm and agriculture development. Value Added Tax (VAT) can be applied to control macro economy and arrange resources as an important circulation tax. VAT can be levied by the margin between purchase-VAT and sale-VAT, work with neutrality, assure equal competition, accelerate economy rise and raise finance. Theodore Schultz, an American economist, says that agriculture stagnation can't be ascribed to natural resources, but macro economics and agriculture policy's fault. Undoubtedly, VAT can work in agriculture industry. In detail, VAT can affect the price of agriculture products, before-produce stage and after-produce stage. As a conclusion, in the whole VAT system we should formulate agriculture VAT policy that can support agriculture with reality in regard to the characteristics of the agriculture.Our country is a traditional agriculture country. Our government formulates preferential VAT policy in the whole agriculture industry to support agriculture. What is the more important; we should pay more attention to the effects on fact. According to survey, agriculture VAT policy brings about some problems. Government doesn't tax a part of basic agriculture investment, but VAT advantage is occupied by company engaged in manufacture of the agriculture investment because the price of the agriculture investment grows; government doesn't tax the agriculture products famers produces themselves and company engaged in circulation and manufacture of the agriculture products is applied by 13% as purchase-VAT tax rate but VAT advantage is occupied by company above because company above can lower the price of the agriculture products; peasant undertakes daily necessities'VAT burden; companies engaged in circulation and primary manufacture of the agriculture products and engaged in advanced manufacture of the agriculture products can't be taxed rationally; agriculture skill service is levied Value Added Tax and Sales Tax repeatedly.This passage puts forward proposes to perfect our agriculture VAT policy in consideration of alien advanced experience and our reality. We can apply Europe countries' methods to reduce the cost of agriculture investment; bring peasant into VAT; give the company engaged in circulation and manufacture of the agriculture products full purchase-VAT, at the same time support important head companies; raise agriculture companies'VAT refund rate to win in international market. We also should take auxiliary measures to operate in coordination.