Vat Expansion Problem Research

The “Twelfth Five-Year Plan" on speeding up the reform of fiscal and tax systemputs forward:"expand the scope of value-added tax, correspondingly reduce businesstax". Carrying out the pilot that the value-added tax substitutes for business taxsuggests that the VAT expanding reform is becoming an important aspect of financialand taxation system reform. It plays a positive role in eliminating double taxation,making tax burden fair and optimizing the tax structure. On one hand, along with thetrail connection, exchange and integration of Chinese economy and internationalmarket conform, the new format in the service industry will continue to emerge anddevelop, and the scope of value-added tax is without the tertiary industry, it leads tobe deficient in tax fairness among the industries; on the other hand, in the wake of the2008global financial crisis, Chinese economy has already walked out of predicament.Considering China’s current economic situation, the massive fiscal expenditure policyof macroeconomic control policy is unmatched with the situation of slow antibiosis ofcurrent economy do not match, the value-added tax reform as a breakthrough point ofthe tax cuts has become the best choice in this period. Based on Shanghai tax reformas the pilot，how to expand it to the whole area has become the focus of tax reform.This paper uses the theatrical and empirical analysis. Firstly we usetheatrical analysis method to prove the rationality of value added tax replacingthe business tax from the tax efficiency principle, fair principle and consumerwelfare effect，we make a conclusion that the reform of expanding scope ofthe value-added tax is conducive in promoting industrial upgrading, theadjustment of economic structure and the welfare of consumers. Then，theempirical part analyses two kinds of macroeconomic control policy---financialexpenditure and tax cuts by comparison method,we emphasize their influenceon economic growth. By using input-output table, we estimates the repeatedtaxation scale caused by consistence between the value added tax and businesstax. Above all，combined with the current economic development situation， we reach that: value added tax as a kind of tax cuts is more suitable for thecurrent economic development situation. Finally we select the path and makereasonable design to promote the expanding reform of value-added tax in thewhole area from the two categories of taxpayers, tax rate, preferential tax,interest coordination between the central and the local government and otheraspects. The innovation of this paper proves that the expanding reform ofvalue-added tax is a trend by analyzing the effect of fiscal policy and tax cuts toeconomy growth. And the inadequacies of the paper are the inaccurateestimation of the repeated taxation scale and shallow discusses about theproblem that is caused by the expanding reform of value-added tax.