The Effect Of Replacing Business Tax With VAT

Replacing business tax with value added tax(hereinafter referred to as the VAT), is the reform of transportation industry and part of the modern service industry which put into effect in Shanghai on January1,2012in the first place, then spread to nationwide on August1,2013. The reform is another important step of tax reform process in our country, and a new landmark after comprehensively implementing VAT reform in2009, can promote economic and social development. Because the reform has just implemented more than two years, many domestic scholars study the comprehensive influence of the reform mostly in theory, not from the angle of empirical analysis. Based on the existing research of replacing business tax with VAT, this article use the data to further study the whole effect of the reform, such as tax effect to enterprise and economic growth effect, make a summary of pilot work, carefully find the problems, and put forward measures to improve the problems, in order to speed up the pace of reform.This article is divided into three parts:the first part includes the first chapter and the second chapter, which is the theoretical basis of the whole essay. It introduces the background and significance, the status and achievements on this issue both at home and abroad, the research methods and contents, innovation points and deficiencies. At the same time, from the basic theory of VAT and business tax, it emphatically illustrates the theoretical basis and practical significance of replacing business tax with VAT. The second part includes three chapters, from the perspective of tax burden and economic growth, systematically analyzes the effect of this reform. The third chapter is the tax effect of replacing business tax with VAT. On the macroscopic aspects, the reform can change tax structure, make the explosive tax growth turn to steady sustainable growth; on the microscopic aspects, the reform can bring profound influence to the change of corporate’s tax burden. Take transportation companies for example, it measures the reform’s tax effect in detail. The fourth chapter is the empirical analysis on the economic growth effect of replacing business tax with VAT. It predicts the economic growth effect of this reform by the method of empirical research after it fully conducts in our country, providing a certain theory basis for its full implementation. The fifth chapter is reform process and current situation of replacing business tax with VAT. It grasps the reform process from a macro perspective, summarizes the pilot running situation, then concludes other effects of replacing business tax with VAT, and analyzes the problems existing in the reform process. The third part is the last chapter, chapter6, conclusion and suggestions. It summarizes the whole effect of replacing business tax with VAT; puts forward the improvement strategy from the angles of enterprise and government in view of the problems, in order to promote the three-step development strategy of the reform.