Study On The Effect Of The Business Tax Reform To Levy Vat

China’s economic structure need restructuring, under the pressure of resources,environment, population and other aspects.one of the most important steps is tovigorously promote and develop the tertiary industry in recent years, which we can seeform China’s relevant policies, and taxes policy is undoubtedly one of the greatestinfluence on corporate financial policy. In our current tax structure, the VAT and salestax are the two most important turnover tax taxes, both discrete parallel, the secondaryindustry value added tax in addition to the construction industry, the tertiary industry’smost sectors the lesson levy sales tax. However, in the actual collection process, due tooutdated business tax regime with a single, double taxation problem is serious and thereis a collection loopholes and other defects, to some extent hindered the development oftertiary industry, and as a benign tax VAT, due to its tax neutrality broad features, wellmaintained tax fairness and efficiency, and therefore favored by more and morecountries.With the level of China’s economic development continues to improve, the pace ofindustrial restructuring and upgrading is accelerating, especially the rapid rise anddevelopment of the tertiary industry, making the drawbacks of the current value addedtax and business tax regime coexistence of the two tax systems emerge, the tax reform isimminent so business tax with VAT was put on the agenda. October26,2011, the StateCouncil executive meeting discussed the issues around the expansion of VAT, themeeting decided: To further address the goods and services tax in double taxation issues,improve the tax system, to support the development of modern service industry, from2012effective on January1, carried out in some regions and industries to deepen theVAT system reform, the industry is gradually changed business tax levy VAT. Giventhe business tax with VAT involves a broader, complex adjustment of interests, in orderto ensure the smooth implementation of the reform, China decided to take a gradual, stepby step path to expansion fences. Taking into account the complete range of services inShanghai, and the relevant supporting policies and measures more perfect, the radiationeffect is very obvious, so choose the first pilot conducted in Shanghai, which is the fullimplementation of the reform of the accumulation of experience.Currently the business tax reform VAT pilot has commenced in the country, thebusiness tax reform VAT on business, industry and the promotion of the role of theindustry’s economy become more and more obvious. At the same time, the pilot process problems have gradually emerged. In this paper, under the basic theory of VAT, Icombined with the actual situation of China’s tax reform, to maintain tax neutrality, aswell as to curb the loss of tax revenue to promote the structural tax reduction, promotionand international tax practice in four areas, the analysis of the " VAT replaced businesstax " the necessity, and on the " VAT replaced business tax ", the implementation of thepath and the current " VAT replaced business tax ", the content and implementation ofkey policies to do a simple summary. As the first in Shanghai to start a pilot, a long time,the effect of the reforms and the process of the various problems are more obvious andtypical, so this article in Shanghai, for example, from the tax system, the tax industry,industrial four aspects of the structure and local finances, combined with the latest datayear after the reform, research and analysis," VAT replaced business tax " broughteffects. After the business tax with VAT, local tax revenues as one of the main sourcesof sales tax into the national tax system, property rights is bound to divide the centraland local institutions put forward higher requirements, so the whole country will beforced taxation system reform, promote further improve our taxation system. On thewhole society and the entire industry, not only to improve the VAT chain, but alsoeliminate the phenomenon of double taxation, thereby reducing tax pressure on allaspects of social reproduction. Decline in the tax burden will push enterprises to reducecosts, then reduce prices and the inflationary pressures. Comprehensive VAT, abolishsales tax on the tertiary industry, it will reduce its tax pressure and promote their healthydevelopment. Meanwhile the aid business tax reform VAT tax reform environment,companies can gradually achieve the separation of the primary and secondary, the mainindustry without reservation, and producer services also have the opportunity to becomemore better and stronger, the objective is conducive to change the business model oftraditional state-owned enterprises, to reverse the current large and small but the businessmodel. While the tertiary sector of services exports can be implemented when the VATexport rebate, which makes our products in the labor tax burden can be on an equalfooting with the EU and other countries, thereby enhancing the internationalcompetitiveness of China’s tertiary industry. But at the same time reducing the tax burdenon businesses, government tax revenues will also decrease, data show that business taxreform VAT, if implemented nationwide, China’s tax revenue is expected to more than100billion net decrease, which will give our local governments bring a lot of pressure,and because the VAT own characteristics, local governments will also have the ability toput a higher tax regulation requirements. Came to the conclusion based on the analysis ofthe current "VAT replaced business tax "overall assessment of policies and policy recommendations in order to help" VAT replaced business tax" to work smoothly, andultimately to promote the progress of China’s overall economic and social development.