The Policy Selection Of Banking Industry’s VAT In China

As an important productive sector, banking services plays a huge role on the real economy, and it should give priority to the development of the banking sector. From a practical point of view, our country is a bank-based financial structure, asset of the banking sector accounted for the lion’s share of the financial system, which is far more than the capital markets and debt markets. And its influence as well as function is so great that other financial markets far cannot be compared. For the economic development of the banking sector can provide sustained funding, and split the risk of the market, while banks also have function to allocate resources to improve the function of enterprise payment system. These features make banks and the real economy closely linked, one prospers or makes a loss, the other one experience the same period. Therefore, to optimize the financial allocation of resources, and promote the rapid development of the bank, the bank can be more effective support of the real economy, as it promotes China’s economic health, sustainable and stable development of a social consensus, which is advocated by the central government.However, the development of China’s banking industry is facing constraints of business tax. Because of the business tax itself, the current tax system cannot support the development of the industry and market banking codes of conduct and proper guidance, resulting in China’s banking industry has been unable to make a breakthrough, even confront risk. Therefore, the banking business tax reform has become the focus of public attention which needs to be solved immediately.The theme of this paper is to select and design ideas and countermeasures of VAT system of banking, and in the end get result of choosing zero tax rate method as the most suitable method of banking VAT taxation.