Impact And Countermeasures On TCM Manufacturing Enterprises With Replacing Business Tax By VAT

Replacing Business tax by VAT is one significant reform for advancing economystructure adjustment&promoting economic transition, and also an importantcomponent to structural tax cuts. Therefore, research on replacing Business tax byVAT towards the effect&countermeasures by traditional Chinese medicine (TCM)manufacturing enterprises, for the industry to fully make good use of policies to seizeopportunities for development, has important practical significance.This paper compares the characteristics of VAT and business tax, summarizesrelated international perspectives, and takes in-depth analysis of correspondingeconomic effects, meanwhile, outlines the objectives and principles of tax planning,and analyzes the Chinese medicine industry status and tax situation and problems. Onthis basis, this paper chooses three typical OTC TCM manufacturers and threeprescription TCM manufacturing companies, compiles the data of their profit and loss,cost structure and tax payment, adopts mathematical models to calculate the effectfrom "Replacing Business tax by VAT" to typical TCM enterprise sales margins andthe impact of the tax burden. The paper’s research indicates that "Replacing Businesstax by VAT" will raise TCM industry sales profit about0.87%, and minus tax burdenabout7.17%. Meanwhile, the paper also qualitatively analyzes TCM relatedindustries, and points out its indirect impact on TCM manufacturing.Based on the results of the study for above typical TCM manufacturing enterprises,combined with tax planning theory, the paper puts forward specific tax planningprogram towards TCM manufacturing industry under the "Replacing Business tax byVAT" policy. On this basis, combined with TCM manufacturing status and modernbusiness management theory, this paper presents TCM industry with possible changesabout seven fields and countermeasures under the "Replacing Business tax by VAT"policy-driven business model, serving as an important reference for enterprises torespond promptly to the introduction of Replacing Business tax by VAT.