Study On The Problems About Tax Collection And Management Of Individual Businesses In China

Since emergence in the early1980s, individual business has been characterized by large quantity, wide business scope, small quantity of tax sources, and large number of the persons involved. Though taxation in storage only constitutes a small proportion of total tax revenue, its management faces not only the greatest difficulty in basic taxation work, but also the problems such as outdated tax collection and management means, severe tax evasion, and remarkable contradiction between tax collectors and taxpayers. Though practice department has been paying attention to tax collection of individual businesses, there is a lack of the studies on the tax collection theory of individual businesses in academic community. Meanwhile, scholars are confronted with the difficulty in making an in-depth, meticulous, and comprehensive research and interpretation on tax collection of individual businesses due to the lack of practical experience in tax collection of individual businesses. Additionally, tax departments, especially grass-roots departments, only focus attention on superficial reform measures due to the absence of the in-depth theoretical guidance. In this paper, the author’s grass-roots working experience and theoretical reflections are combined to make an analysis from the perspective of tax compliance theory. Taking for example the tax collection of individual businesses in Hangzhou, this paper categorizes taxpayer’s noncompliance through the questionnaire about the compliance degree of individual business taxpayers in Hangzhou. The deep causes for taxpayer noncompliance are analyzed from various angles according to the comprehensive factors causing taxpayer noncompliance rather than only based on tax system and law enforcement. Meanwhile, in adherence to tax system simplification, tax burden reduction, tax base expansion, and structure optimization, specific reform suggestions are presented from different aspects such as about system, tax collection, organization, concept and technology. Below are major contents. First, it is necessary to deepen and perfect tax system reform, expand the scope of replacing the business tax with a value-added tax, and lower tax threshold. Second, various channels should be established to improve tax collection and management quality. Third, there is a need to transform the outdated concept and raise taxpaying service quality. Fourth, the cooperation among different departments shall be conducted. Fifth, management and service quality should be upgraded from technological perspective.