A Study On The Impact Of Business Tax On Value - Added Tax On Road Transportation

According to the Ministry of Finance of the People’s Republic of China and State Administration of Taxation, since January 1, 2012, transportation industry and part of the modern service industry in Shanghai began the pilot tax reform in which Business Tax was changed to Value-added Tax. On August 1st in the same year, this change has been expanded to the other 10 provinces/cities and spread across the entire country formally in August 1st, 2013. As a result of this policy change, the road transportation industry in Yunnan province is expected to be impacted greatly.As the fundamental, pioneering and service-type industry, road transportation plays an important role in deepening the reform comprehensively and building of a well-off society. With the background of the VAT reform, based on a great amount of previous literature, this paper aims to systematically demonstrate the influence of the VAT reform on the enterprises and other related industry, as well as the fiscal revenue through analyzing the data collected from large road transportation enterprises. This paper is divided into the following sections:First chapter, introduction. This section introduces the research background, the significance, the purpose and the research methodology of this study. Besides, literature review, research innovations and the paper structure are briefly introduced.Second chapter, taxation theories. This section introduces relevant taxation theories, including tax neutral theory, theory of optimal taxation and transfer tax theory.Third chapter, analyzing the impact of tax reform on road transportation industry. This section explicates the significance of the VAT reform change from the perspective of industrial development and taxpayers. Furthermore, empirical analyses the road transportation in Yunnan province after the tax reform. Based on the data from the local large transportation enterprises, this section illustrates the impact of the VAT reform on the profit of the enterprises and related industry, as well as on the fiscal revenue, which is consistent with the conclusion in chapter three.Fourth chapter, experiences of the VAT from the foreign counterparts. Tax rate, VAT system and taxpayer learned from the European countries, American countries Asian countries.Fifth chapter, the problems existing in the tax reform among road transportation industry of Yunnan province. With the implementation of the VAT reform policy, some road transportation industries still suffered from increased taxes instead of getting relieved from tax reduction; tourist transportation has not been included into the tax reform policy formally; general taxpayers burden higher tax than before, which impeding the transformation and improvement of the industry; government revenue decreases.Sixth chapter, suggestions to the VAT reform policy in Yunnan province. To resolve the problems mentioned in chapter five, suggestions were proposed. Firstly, properly expand the scope of the tax-deductible items; secondly, properly expand the scope of the tax preference in the road passenger transport industry; thirdly, properly lower the standard of the general taxpayers and improve the financial subsidy policies; lastly, rationally adjust the proportion of sales taxes in the fiscal revenue.Seventh chapter, summarize all the paper, demonstrates the positive significance as well as the problems existed in the VAT reform.