Research On The Banking Turnover Tax Reform Of China Under The Background Of Change From Business Tax To VAT

The banking is an important part of China’s financial markets, which plays an important role in improving the efficiency of the allocation of funds and promoting the healthy development of the national economy. Although the operating efficiency of China’s banking sector has gradually improved in recent years, but the rapid development of China’s banking is due to the national protection-policy, if interest rates is fully determined by the market, the operating efficiency of the banking will face serious challenges. Furthermore, the existing unreasonable business tax burden is an obstacle to the further development of the banking. For the sake of improving VAT deduction chain, developing modern service industry and constructing Shanghai international financial center, it is necessary to change the turnover tax. Last year, the Ministry of Finance, the State Administration of Taxation issued "Pilot Proposals for the Change from Business Tax to Value-Added Tax", including the reform of the financial sector, which is applicable simple VAT tax method. But how to carry out the change from business tax to VAT for the financial and insurance industry, there is no specific program.So this paper is based on the above context, applying theoretical and empirical analysis to provide some ideas in improving the financial sector’s turnover tax system in China, providing a more rational tax system for the banking development, improving the competitiveness of China’s financial industry.This paper is divided into six parts. The main content and views are as follows:Chapter Ⅰ, Introduction. First, we will clarify the background and significance of the topic, then, make some reviews of the banking VAT research.Chapter Ⅱ, some banking VAT related theoretical studies.Chapter Ⅲ, the basic situation of China’s banking turnover tax.Chapter Ⅳ, the banking VAT experience and enlightenment from the other countries.Chapter Ⅴ, the empirical analysis of the impacts from business tax to VAT.Chapter Ⅵ, some difficulties and suggestions on China’s banking VAT policy.The main contribution of this paper is as follows:First, more detailed and thorough analysis of the theoretical part. First, the paper analyze the foreign literature of the VAT from different views, and how to impose the VAT, which make it more useful for reference; Second, the paper tries to seek theoretical support on banking VAT, while the previous papers were rarely involved in;Second, the previous articles for the banking sector to levy VAT were mostly normative analysis, while this article is from the empirical analysis angle to demonstrates banking VAT reform;Banking VAT reform has been the trend of the times. Standing in the perspective of the interests of the whole country, the fundamental purpose of the banking reform is not to cut the tax burden,but to improve the chain of VAT deduction, promote the integration of the development of the banking sector and the manufacturing sector, and reduce the tax burden of the modern service industry as a whole, in order to support China’s economic transformation from the tax policy.