Research On China’s Agricultural Value-added Tax Policy

Agriculture as the foundation of our country plays a pivotal role in the development of our national economy. In the early stages of China’s industrialization, in order to promote the rapid development of industry, the state has adopted a series of policy to develop the industry. With the advance of the country’s industrialization, the country’s overall economic level has been an unprecedented increase, but at the same time the pace of agricultural development is very slow. The level of specialization of agriculture and the price of agricultural products are very low,the income gap between farmers and urban residents is widening.In this context,the state must make effective policies especially financial and tax policies to improve the development of the agriculture.VAT is one of the most important turnover tax, it is an effective means of organization of state revenues. Because VAT is levied only on the value added, so no matter how many production processes there are will not affect the taxation’s collection,so it properly implement the fair principle of taxation,and it can also guide the adjustment of the industry structure. VAT is very important so that the policy of VAT plays a very important role in our taxation policies.Since1994, China began to levy VAT, China’s VAT policy reformed four times, including agriculture-related value-added tax policies are constantly changed in order to achieve the purpose of promoting the development of agriculture and to increase farmers’ income. But nowadays the effect of agricultural value-added tax policy implementation is not good,even on the contrary, some agricultural value-added tax policies also increased the burden on farmers to some extent and hindered agricultural industrial development.This paper discusses the effect of the implementation of the existing agriculture-related value-added tax policies from the areas that agricultural production is produced and sold,acquisition and initial processing areas,deep processing areas and so on. Next with an international view,this paper introduces VAT agricultural policies in Europe and American countries to share the advanced experience of their agriculture-related value-added tax policies.Finally, this paper presents proposals for reform of our agricultural value-added tax policy.As to the agriculture-related problems with the implementation of our existing VAT policies,this paper make the reform proposals to solve them one by one.