Study On The Tax Policies That Promote The Service Sector Transformation And Upgrading Of Guangxi

The service industry has become a vital component of the national economy, and the transition and upgrade of this industry can help improve the overall efficiency of the service industry and the social economy. Therefore, it is inevitable to develop the service industry to achieve the rapid expansion, transition and upgrade of the economy. As tax revenue is one of the important means for government to regulate the economy, the government needs to take full advantage of tax revenue to facilitate the development of Guangxi service industry and to achieve the transition and upgrade of the service industry.This article has adopted the combination of theory and demonstration as the analytical method. In the theoretical analysis part, the theory which discusses the impact of the taxation policy on the development of the service industry has been summarized. Moreover, Guangxi has been used as a real evidence to analyze the correlation between taxation policy and the development of the service industry, and structured a multiple regression model which based on the endogenous economic growth model. It is discovered that the development of the service industry is significantly impacted by and negatively correlated to the service tax burden rate. By using the VAR model, which is constructed by the data of tax revenue and the service industry of Guangxi, it is found that the taxation policy and the development of service industry showed a long-term equilibrium relationship. The increase of the direct tax ratio is also positively correlated to the development of the service industry. The result of the empirical analysis is in accordance with the theoretical analysis.After the thorough analysis of the current situation of Guangxi service industry, it appears that Guangxi service industry had several problems such as the fall-behind of the overall development, the heavy tax on the modern service industry and the lack of development. In addition, when using the tax policy to further the transition and upgrade of the service industry, the following problems have shown up:the restriction of the commodity turnover tax on the development of modern service industry, the lack of the guidance to the modern service industry, the simplicity of the tax preference mode, the weak execution and the imperfection of the project ’replacing the business tax with a value-added tax’. According to this, a taxation policy which can advance the transition and upgrade of Guangxi service industry has been proposed:improve the tax system, perfect the incentive system of tax policy, mend the project ’replacing the business tax with a valued-added tax’ and restore the tax incline to the modern service industry.