The Change From Business Tax To Value-added Tax And Its Influence On Transportation Industry

The tax supports the national finances.The tax system has been reformed of formany years, but in some industries, there is an unreasonable tax arrangement.Transportation, services and other sectors as the tertiary industry levy sales tax, butsales tax is levied at the taxpayer’s turnover on each process of production, so salestax increases the tax burden of businesses. For such a long production chain industry,it is suit for value-added tax (VAT), as VAT is levied at value-added on each stage ofproduction. Value-added tax will not cause the phenomenon of double taxation. Othercountries in the world, tax most of the tertiary industry for value-added tax and asmall part of the tertiary industry levy on sales tax. With the developing of marketeconomy, the integration of the tax system into the world has become more and moreurgent. China’s economic development needs economic restructuring and industrialupgrading.The State Council decided to tax reform, adjusting of VAT occupancy ratio andexpanding the scope of VAT. From1January2012, the reform on the transportationindustry as well as part of the modern service industry began to implement inShanghai. From1August2013, the pilot range rolled out across the country.From1January2014, the railway transport and postal services joined the pilot range,from June1, telecom industry implant the tax reform.On January282015, the StateAdministration of Taxation said the implementation of the sales tax changed to VATachieved remarkable results, playing a role on structural tax cuts. Until now manyindustries has been included in the scope of the pilot, including transportation, postalservices, telecommunications and7service sectors. In2015, our country will continueto deepen the sales tax changed to VAT and expand the scope of the pilot profession.In recent years, the number of transport companies has been expanded rapidly and the growth of the national economy is closely related with it."To the rich, firstbuild roads" tell us the importance of transportation. Using transportation lends toupgrade the industrial structure, improve economic efficiency and contribute toeconomic growth. The policy of sales tax changed to VAT in the transportation industryavoids the huge cost of the tax for companies. However, the findings of the ChinaFederation of Logistics and Purchasing said that the tax of some of the objects has notbeen reduced, but increased, which is not expected.This paper first introduces the background of research, and focuses on howbusiness tax is changed into VAT, analyzing the policy implications. Second weanalyze of the positive and negative impacts on transportation industry. Cite ChinaSouthern Airlines, according to specific financial data to calculate the tax differences.We analyze that the tax reform brings the tax impact on companies such as ChinaSouthern Airlines. Concluding that, such a large-scale corporate, the increasing of taxburden in the short term is normal, but in the long run, the reforms help to reducetaxes burden. Finally, we give some advice from three different positions.