How To Deal With The "business Increase" By Construction Enterprises

The coexistence of the business tax(BT) and value-added tax(VAT) has brought about lots of problems due to the current economic environment. To solve these problems, our country has implemented a “VAT reform” pilot program in selected areas since 2011. Guided by the “12th Five-Year” plan, our country will gradually expand the “VAT reform” range and finally replace BT with VAT. According to the plan, the construction industry will be recently included into the range of the “VAT reform” pilot.Construction industry is one of the basic industries of our national economy, which plays an important role on our economic development. As we all know, the profit of the construction industry is normally lower than other industries, and meanwhile, the construction industry is located in the intermediate position of the social reproduction circle. Thus, the tax reform will certainly have a great impact on various aspects of the business and management in construction enterprises. Though the aim of the “VAT reform” to the construction industry is to decrease the tax burden, however, on the basis of the diagnostic result of the “VAT reform” investigated by the construction association in 2012, only 8 enterprises of the 66 sampling construction enterprises can decrease their tax burden, indicating that the tax burden of most construction enterprises will increase. The data also shows that the average tax is 5.83% which increases 94.4% comparing to the previous 3% business tax. In my point, this phenomenon has a very close relationship with the current business environment and the irregular management of the construction enterprises. In this thesis, one construction enterprise R is taken as an example, by analyzing its “VAT reform”result, several reasons of tax burden increase are obtained. Next, some response measures are proposed for R after checking various aspects of its business and management. Finally, three suggests were presented for construction enterprises to prepare the upcoming “VAT reform”: Firstly, has a good communication with the government so as to know the policy guidance and make in-time adjustment as well as coordinate with the government from the enterprise’s point of view. Secondly, make proper adjustment to each aspect of the business and management so as to adapt to the requirements of VAT and develop a good tax plan. Thirdly, arrange the procurement of the material and permanent assets in a suitable manner.