VAT-type Reform,Nature Of Stock Rights And Enterprises Investment

In order to solve the problem such as the shortage of fiscal revenue, corporate blind investment of the enterprises and market inflation, the production vat was reformed in 1994. The production VAT plays an important role in Chinese taxation system since its introduction to China. However, the production VAT inhibits the company’s investment enthusiasm and undermines the neutral principle of tax with the development of the economy. Based on the above consideration, the government begin explore the reform methods about VAT actively.The VAT reform was implemented from the Pilot regions to the nationwide areas. Since July 1 of 2004, the VAT reform is carried out in the pilot regions (Northeast) with the manner of incremental deduction; Subsequently, the VAT reform carried out in 26 industrial cities of the six provinces in China and 5 cities of the east of Mongolia. In 2008, Wen Chuan area was for the first time to carry out the VAT reform. Until 2009, the VAT-type reform was officially implemented in nationwide areas.This paper draws on the related domestic and foreign literatures, analyzing the impact of the VAT reform on enterprise investment from the theoretic and empirical. We compare the different of the size of fixed assets and tax levels since policy was implemented. Then, using the data of 269 companies from 2006 to 2011, we find that the VAT reform stimulate the enterprises to expand fixed assets investment and accelerate the pace to update the device. Due to the differences of decision-making process and development Goals, the impact of the VAT reform on non-state-owned enterprise investment more effective.