Talking About The Influence Of The Value - Added Tax Expansion And Reform On The Development Of Waterway Transportation Enterprises

Since January 1st, 2012, the scope of VAT expanding reform began to pilot in Shanghai City, which is a big step for China’s VAT reform. This reform has significant effect on the transportation industry especially the water transport enterprises, which are in the lion’s den. In this paper, this paper compared the differences in the expansion of VAT of water transport enterprises in before and after the reform from the following aspects, namely, tax system elements, policies of transition period, zero rate policy and local policies. Then, the author explored the VAT reform’s impact on the development of water transport enterprises from both theoretical aspect and empirical aspect. In the theoretical analysis, this paper uses the methods of factor analysis to explore the influence of VAT reform on water transport enterprise from the following aspects, like tax burden, profit, cash flow, financial statements, management decision etc., which depend on the business revenue, gross margin and the proportion of deductible items in operating costs, the purchase of equipment and other factors. In the empirical analysis, based on the 2010-2013 data analysis of waterway transport industry in Shanghai and Shenzhen stock listing Corporation, this paper found that some enterprises benefited from the VAT reform. Finally, this paper put forward some policy suggestions from both the government and enterprise perspectives. The government needs to accelerate the expansion of value-added tax reform process in order to eliminate double taxation further, and give appropriate preferential tax policies for water transport enterprises in order to encourage mergers and acquisitions. The companies need to make clever choice of the right time to identify and deduct VAT, strengthen cost management, and establish strategic cooperative partnership by strong combination in order to walk out of predicament together.