The Study Of Levying VAT On Railway Transport

Since the tax reform in1994, the VAT tax reformation became an important part of the next step to upgrade the efficiency of our tax system. VAT is an efficiency taxes, the multiple national tax practice has shown that a complete and comprehensive coverage VAT can solve many problems, such as double taxation and tax regressivity. In our country, the scope of VAT tax is so narrow that the VAT chain was broken, which brought about double taxation and other inefficient results. After the VAT reformed from production-based to consumption-based in2009, the VAT expanding reformation began in China. Transportation as one of the industry first included in the pilot, is an important part of the VAT reform. The railway transport is the backbone of transportation, but because of its specificity, was not included in the first step of the pilot. Therefore, I choose railway transport as an entry point, using the combination of qualitative and quantitative analysis method, based on the financial data of the companies listed on railway transport, measure and calculate the appropriate VAT tax rate, taxation system and supporting policy of the railway transport industry.The first two chapters review the results of previous studies of VAT expanding reform, transportation VAT reform as well as the railway transportation industry VAT reform. I find that VAT expanding reformation is an inevitable trend of China’s tax reform. And the relevant studies of transportation VAT expanding reform has changed from the necessity and feasibility studies to the specific policy design. But the research on railway transport VAT expanding is few, there is still a lot of parts to study.In the third chapter, I summarized the financial and tax pollicies of foreign railway transport. Because the railway industry has the character of being necessities, public used and positive externalities, most of the governments have certain tax and financial supports of rail transport, which are usually preferential tax rates and fiscal subsidies. Chapter4is mainly about the VAT tax system design of railway transport, including the research of rate and the deductible items. After the calculation, I find that if we set the VAT rate as11%, the tax bearing rate of railway transport enterprises would increase approximately3.15%. In the current state,7%VAT rate for the railway transport enterprises is appropriate. I recommend to set the value-added tax rate of7%of railway transportation industry at first, and then gradually increase the rate with the completion of the reform. Recommended to count the depreciation into input deductible tax.Chapter5is about the supporting policies, including businesses side and government side. For railway transport enterprises, it is recommended that to give away reasonable financial subsidies, and advancing the railway organization structure. To protect of the local tax revenue, after the industry-wide implementation of VAT, the VAT share of local government should set between50%to60%. And it is recommended to carry out the merger of the national and local tax at the appropriate time.Innovation of this paper is that the topics and the research methods. Quantitative research on railway transport VAT expanding reform has not appeared in the previous paper yet. At the same time, the use of the listed company’s financial data to study is the first attempt in this area.The largest deficiency is that I can only get information from the public data. Due to the limitations of time and ability, I could not set questionnaire to get the sample data. The data is very limited. So the research can only roughly reflect the situation of railway transport industry.