Analysis On The Impact Of Transformation Of VAT On The Shishi Regional Economy

When international financial crisis erupted in2008, our country implemented theproactive fiscal policy and moderately loose monetary policy, and developed a4trillion investment plans. Facing with the continuous heavy government investment,private consumption and investments are driven but not active. According to China’snational conditions and characteristics, the State Council decided to implementConsumption-based value-added tax from January1,2009. This new reform measure,reduces the pressures of numerous small and medium enterprises, also will drive theenterprise and the local economy to adjust the internal structure spontaneously at thesame time, and will finally promote the healthy development of the whole economicarea. This article chooses Shishi as the breakthrough point, with qualitative andquantitative analysis for means, making use of the empirical analysis, finds thattransformation of value-added tax will bring the following influences to the city’smacroeconomic: first, to cultivate tax sources effectively, and promote the sustainedGDP growth of Shishi; second, to promote the fast foreign trade growth of Shishi;third, to increase the fixed asset investment like equipment instruments;and to takethe positive effects on the local industrial structure. The transformation ofvalue-added tax will also bring the following influences to the city’s microeconomic:first, to reduce the tax burden of the comprehensive enterprises; second, to stimulatethe fixed asset investment like equipment instruments; third, to improve theenterprises’ financial conditions, and alleviate tensions of the business cash flow. Thisarticle evaluates the economic situation of the city under the transformation ofvalue-added tax from the perspective of macro and micro, and puts forward someconstructive suggestions for enterprises to better cope with the tax system reform.