Research On The Impact Of VAT Reform On Industrial Financial Performance

With the vigorous development of China’s market economy, sales tax and VATdiscrete problems of coexistence regime has become increasingly prominent. Thephenomenon of double taxation, the narrow tax base and the unreasonable current VATrate design issues, resulted in the interruption of value-added economic activities taxdeductible chain and the concern on the impact of the VAT on the neutral effect. TheVAT reform was originally conducted at Shanghai since2012, January1st, till August1st2013, the reform spreading to nationwide level, which was highly requested byChina’s current tax system. In addition, this reform has important implications for thetertiary industry. This article starts from the sales tax, value added tax and taxmechanisms related concepts, expounded the necessity and feasibility of the reform.Next, from the point of view of several company dimensions, the article appliedtheoretical analysis methods to analyze the impact of the reform for the company.In order to analyze the results of the data, the paper selected six industries143companies in the Shanghai pilot as samples and obtained the financial data of year2012to analyze the reform impact on the samples industries by means of analyzingoperating profit, net profit, return on assets and other financial indicators, the result ofwhich is that the construction and installation sector was affected most. Finally, thepaper summarizes the business tax reform issues that may be encountered, such as theplight of collection and management of national and local tax collection divisionproblems, etc. In the end, reasonable advice and recommendation of policy have beenprovided, with combining the actual proposed capacity, such as the reform of thecurrent tax rates, implementation of gradual reform steps, such as central and localvested plan selection.