Study On Tax Risk Assessment And Control Mechanism In China

Tax risk is due to the impact of a variety of uncertainties, making tax subject’s purposeful behavior inconsistent with expectancy, thereby reducing the extractive capacity of tax revenues and efficiency in the use of the tax, thus resulting in possibilities lied in inconsistency between the results and expected targets. Tax risk is existed in the entire taxing process, involving taxpayers, leviers and more other subjects. In a country, tax risk is an objective fact. In a sense, the danger of tax risk is no less than that of financial risk. However, tax risk is often neglected for it is imposed by the forcible power of a country. Also, because of its feature of accumulation, tax risk will impose indelible impact to the economy and society as a whole. In addition, it will result in a huge loss of revenue, undermining the fiscal normal order, and breaking the balance of government revenue and expenditure to a greater extent. Therefore, tax risk’s study should be explored in depth in order to take timely measures and countermeasures to prevent and resolve problems.This thesis is divided into five parts and four chapters. The first part is the introduction which contained the research background, its significance, the literature review on tax risks from home and abroad, the research methodology, innovation and deficiencies. Including COSO risk management theory and risk control three, based on the two theories that the tax risk is can prevent and dissolve in advance of the event.The second chapter describes the formation mechanism of the tax risk. It explores the causes of tax risk in different aspects:the uncertainty of taxpayers’ behaviors, diversified targets in taxing authorities, uncertainty of the efficiency of the tax use, tax reform and the variability of external environment.The third chapter gives a perceptive assessment for tax risk in China. First a risk-assessing system is established by three aspects, which are the institutional indicators (including concentration index, dispensability index, tax base erosion index, collection of delay index, tax cost index)and taxation indicators(including macro tax burden index, tax evasion scale merit, the tax authority collection level index)and the efficiency in the use of revenues. Different risk areas have been divided, namely the green area(safety), yellow light area(risk warning zone)and red light district(crisis warning area), and then based on the established evaluation system evaluation in China’s tax risk degree, that is, on the whole, is located in the yellow light area.Chapter four puts forward countermeasures to guard against and defuse China’s tax risk. Standing from rectifying the behavior of taxpayers, this thesis proposed the establishment of mechanisms for taxing service, taxpayers’ credit constraint and taxing penalties; standing from rectifying the behavior of taxing authorities, it proposed to change the traditional mechanism of tax assessment, to improve the tax personnel selection mechanism and to establish mechanisms for information exchange nationwide, regulatory balance as well as emergency response; it also proposed to improve the efficiency in the use of tax and the specification of tax system. It attaches importance to the establishment of tax risk management.