Research On Fiscal Policies Promoting Science&Technology Innovation Of The Enterprise In China

The gap of technology development between China and the world’s scientific andtechnological power is gradually narrowing, but it still exists. At present, China’s economicdevelopment is mainly dependent on cheap labor, high consumption of material resources,taking the extensive, labor-intensive industrial development model, and China is still in thelow-end position in the international industrial chain. Faced with the grim situation, theCPC Central Committee and the State Council put forward the strategy of rejuvenating thecountry through science and education policy, putting the S&T innovation as he strategicchoice of driving sustainable economic development in our country, realizing productivityacross and enhancing comprehensive national strength.And compared with the research and development institutions, universities and othernon-profit organizations, enterprises have better conditions to engage in scientific andtechnological innovation, so enterprise is the main body of S&T innovation. Therefore,how to perfect the fiscal policies to boost the enthusiasm in science and S&T innovationof enterprises is an important issue in front of us. However, technological innovation hasobvious characteristics of public goods, externality and uncertainty, with the market failure,leading to enterprise underpowered to participate in S&T innovation. So this requires thegovernment to conduct a reasonable intervention to motivate the community to participatein S&T innovation to promote the rational allocation of resources in S&T, and theregulation and guidance of the government play an important role in the promoting S&Tinnovation of the enterprise.There are four kinds of fiscal policy tools to promote S&T innovation and they arefiscal subsidy on S&T, tax breaks, venture capital and government purchase. There are stillmany problems in our current implementation of these policies，for example, the scale offiscal subsidy on S&T is small and its structure is unreasonable; The legislative level of taxbreaks is not high, the system is imperfect and the use of policies is non-standard; Venturecapital still faces the problem of the heavy tax burden and imperfect exit mechanism; Thescale of the government purchase is so small that the incentive function of S&T innovationis limited. Then I made the linear regression analysis of the effect of China’s fiscal policieson S&T innovation and the results show that fiscal subsidy on S&T, government purchaseand GDP have a significant impact on R&D expenditures representing enterpriseinnovation ability of S&T while tax breaks and the number of large and medium-sizedindustrial enterprises with R&D activities have not. On this basis, some suggestions aboutthe construction and improvement of four kinds of fiscal policy tools are put forwardincluding strengthening the construction of legislation, optimizing the structure of policyand highlighting the policy guidance, etc.