Problems Of Business Tax VAT Exist In The Process

Reform of the tax system in1994established the parallel system between turnovertax and value-added tax, which is consistent with the social and economic conditions atthat time. But, along with our country market economy unceasing advancement, theturnover tax has seriously not adapt to the development of economy, which has played animportant role.It is in urgent need of reform.And value-added tax can replace it. Thus, thereform replacing turnover tax with value-added tax has become a new round of tax reformtheme. However, reform will have labor pains and a variety of problems. How to solvethese problems relates to the success or failure of the reform. Therefore, the researchregarding to the reform process of the problem and countermeasure appears necessaryparticularly. The paper consists of three chapters.Chapter I explores the necessity of the VAT reform and the reform program. Thechapter summarizes disadvantages of the turnover tax and the advantages value-added tax,in order to prove the necessity of the reform substituting value-added tax for turnover tax.At the same time, it is interpreted partly regarding the pilot scheme of VAT.Chapter II analyzes possible problems in the reform process. This chapter mainlyelaborates the VAT deduction difficulties and the limited dropping problem of the actualtax burden in these small and medium-sized enterprises and related industries, pricereducing as well as the problems of central and local tax revenue allocation conflict,country tax revenue management conflict of the tax-sharing system in the process of thereform of replacing turnover tax with value-added tax.Chapter III introduces solutions of the reform of replacing turnover tax withvalue-added tax exsiting problems. This chapter essentially provides strategies specific tothe problems of the tax reform existing in the small and medium-sized enterprises andrelated industries; in the meantime, it is suggested that reformers pay close attention to theprice changes in the tax reform process; Finally, it is said that reformers should putforward to make corresponding adjustments to the system of tax distribution, in order tocontent the needs of the tax system reform.