Study On The Effect Of Preferential Tax Policies For Agricultural Loans Of Financial Institutions

Agriculture is the foundation of the national economy. Agricultural loans is one of the most important approaches to resolve the problem of capital shortage. China has issued a series of supportive policies, including the preferential tax policy. This paper mainly analyzes preferential tax policies for agricultural loans, through evaluating influences of previous and current agricultural loan preferential tax policy, and finally put forward the corresponding policy recommendations.This article carries on the review of related literature on agricultural loans and supportive policies, the existing literature centers on the relationship of agricultural loans and agricultural economy. In terms of agricultural loan supportive policy, researchers center on the financial subsidies and preferential interest rates. Some experts summarizes a series of preferential tax policies but do not make an analysis of its implementation effects.In this paper, we describe current agricultural lending conditions in China and sort out different agricultural loan supportive policy, especially the preferential tax policy. Then we analyze related problems of agricultural loans. We insist that tax preferential policies aim at adjusting agricultural credit risk and profit expectations of financial institutions.This paper introduces international experience of agricultural loans and preferential tax policies, and makes a summary and analysis of agricultural financial system construction and common preferential tax policies of different countries. We conclude that rapid development of agricultural loans can not live without the government’s support, but in the long run agriculture related financial institutions should be market-oriented, and until then preferential tax policy will be commonly used by the government.In the empirical part, this paper explores effects of typical tax preferential policies issued in 2003 and 2009 on agricultural credit. And also it analyzes tax deduction policy of agricultural loan loss reserves. Based on the empirical analysis, this paper puts forward the corresponding policy recommendations.