The Research On The Reform Of Domestic Consumption Tax Revenue Sharing In China

The thesis of this paper is the research on the Reform of Consumption Tax Revenue Sharing in China. China’s current local tax system took shape initially when the tax assignment reform was launched throughout the country. This system, which has run for 20 years, has played an important role in achieving a win-win goal between the augmentation of local governments’ financial resources and the rapid development of local economy. However, with changes of the situation, the current local tax system has not been fully adapted to the need of further coordinating the tax distribution relationship between the central and the local governments. VAT Reforms to BT makes the local system problems become more prominent, therefore, it’s important to look for a reasonable way to make up for the local fiscal gap.The next part of the article summarizes the basic systems of three developed countries(the United States, Australia and Japan) in the consumption tax revenue sharing and then puts forward the experience that China can learn from. The article finds that in the three countries, consumption tax is positioned as the central and local shared taxes. Among them, the central government basic levy in production, revenues to the central government; local governments mainly levy in the wholesale or retail segment, and revenue to the local government.By the end, the article puts forward several policy suggestions on how to reform Consumption Tax Revenue Sharing in China. For motor vehicles, we can combine the vehicle purchase tax and vehicle excise duty to simplify the tax system, and both levy in the wholesale or retail segment; for oil consumption tax, the proposed reform is shared tax, also expand the collection areas; for tobacco and alcohol consumption tax, it is proposed to change the tax link from the production processes to the wholesale segment, supplemented by the corresponding tax adjustments. Further, since the revenue sharing reform can not be completely divorced from the tax reform, consumption tax revenue-sharing mechanism in the reform process, the need to make the appropriate tax reform package. Therefore, the article also proposes to other five policy recommendations.