A Study On The Effect Of Banking Tax To The Development Of The Small And Medium-sized Commercial Banks

Finance is the core of economy, and the development of economy is directlyrelated to the normal operation and development of finance. Banks are theprincipal part of China’s financial industry, the small and medium-sizedcommercial banks which live in the gap between big banks in and abroad playan important part of the financial system. So it plays a unique role to the nationaleconomy. The small and medium-sized commercial banks have got rapidlydevelopment in recent years, but there are still many problems such as lowprofitability, low asset liquidity and low capital security. There are many factorsnot only external but also internal that affects the banking industry. Banking tax isan important external factor which can’t be ignored. How to seize theopportunities and face the challenges in the “post-crisis” era and survive in thecompetitive environment is our common concern.This paper studies the following contents using both qualitative andquantitative analysis method. Firstly described the overviews of the small andmedium-sized commercial banks and the development of banking tax; thenempirically analysis the relationship between banking tax and the “features” ofthe small and medium-sized commercial banks; in the end this paper gives somerecommendations based on the conclusions of the empirical analysis.Through the statistical analysis of financial data, founding that with therapidly development, the profitability, asset liquidity and the capital security arenot ideal compared to domestic big banks and foreign banks. But the tax burdenis heavier than other industries in home and foreign banks. Through further dataanalysis finding that with the growth of tax burden, the net profit of China’sbanking industry is decline.For the problems found, this paper empirically analysis the relationshipbetween banking tax and the “features” of the small and medium-sizedcommercial banks, empirical results show that: the collection of business taxwould distort the operating behavior of the small and medium-sized commercial banks; the corporate income tax and business tax burden have negative effectwith the profitability, asset liquidity and the capital security of banks, and thesmaller the banks are, the more significant the effect is.Based on the above conclusions, drawing on the basis of experience offoreign banking tax and combining with the development status of the small andmedium-sized commercial banks, this paper gives some further proposes toreform the banking tax. That is, under the guidance principle of efficiency, andthe principle of proportionality, gradually reduce the business tax rate in the nearfuture and gradually expand the scope of value-added tax, design specific taxincentives for the small and medium-sized commercial banks; When theconditions are ripe, we can totally abolish the banking business tax, change fromthe business tax to value-added tax and further improve the corporate incometax incentives and the loan tax policy; gradually establish and improve thefinancial tax system and so on.