The Research Of Tax Preference Reform In China

Tax Preference is a kind of tax incentives, which is used by the government to act in concert with its overall goals covering the development of economy, politics, culture and Eco-environment, and to encourage some taxpayers’activities as well as to take care of the taxpayers in difficulty. Tax preference is an important part of Tax System, also an important means of government interventions in the economy. To adapt to the Economic and Social Development and the realization of the overall goals preferably, Tax Preference Policy changes along with the development of economic society and the constant change of economic system and tax system.The Tax Preference Policy in china has been formed and developed since the tax sharing reform in 1994. It has promoted the rapid development of China’s economy and the social transformation, making a significant contribution to the remarkable achievements of China’s economic and social. But the positive effects of the current Tax Preference Policy in china has been weakening; and the problems, especially the proliferation of regional tax incentives and the chaotic management, have been increasingly prominent because of the new contradictions and new problems along with China’s economic and social development, the promotion of reform and opening-up, the Perfection of the Socialist Market Economy System, and the changes of foreign economic environment. Therefore, there is in urgent need of the reform of the Tax Preference Policy in our country to meet the demands of continual healthy development of Economy and Society. For this end, the third plenary session of the 18th CPC National Congress proposed" we should Strengthen the management of the Tax Preference Policy especially the regional the Tax Preference Policy in accordance with the principle of the unified tax system, and fair tax burden and fair competition. The Tax Preference Policy should be unified and cleaned by the special tax laws and regulations.This article mainly discusses the related theory of Tax Preference its reformation, and analyses the problems existing in the current Tax Preference Policy on the basis of the historical evolution and status quo of the Tax Preference Policy in China. At the same time, this paper briefly introduces the Tax Preference practice in the main developed countries such as America, Britain and Germany, and obtains some experience for reference. Then it puts forward some principles, ideas and suggestions for the Tax Preference Policy reform in China. The structure of this paper can be divided into the following three parts:The first part is about basic theory, including chapter 1 and chapter 2. The first chapter mainly illustrates the paper’s background; and points out the significance of this paper; and comprehensively analyzes the domestic and foreign literature related to Tax Preference for this paper; and introduces the main research methods, main innovation and deficiencies; also arranges the thinking path of the article. The second chapter is the theoretical basis of the Tax Preference Policy reform, which mainly discusses the related theory of the Tax Preference Policy reform, such as defining the relevant concepts of the Tax Preference Policy, and introducing the theoretical existing reasons of the Tax Preference Policy, and understanding Tax Preference Policy tools as well as its functions.The second part is about the problem analysis, including chapter 3 and chapter 4. The third chapter, first briefly introduces the three main development stages of the Tax Preference Policy since the founding of new China; then introduces the main Tax Preference Policies in the present stage of our country; and finally points out six main problems of the Tax Preference Policy, such as low legislative level, vague goals, too many regional Tax Preferences, and unreasonable structure of Tax preference tools, lack of budget system and scientific performance evaluation mechanism for the Tax Preference Policy, and the chaotic management of the Tax Preference Policy. The fourth chapter mainly introduces the Tax Preference Policy in the United States, Britain and Germany; and concludes four significant references for the reform of the Tax Preferences in china, such as establishing clear goals for the Tax Preference Policy, and reflecting legal doctrine principle, building the Tax Preferences Management System on the basis of Tax Expenditure and using multiple tax preference tools.The third part is about the policy suggestions, namely chapter 5. The fifth chapter first points out that the Tax Preference Policy reform in China should adhere to five principles, such as making good use of "two hands", making a balance between fairness and efficiency, carrying out the tax legal doctrine, insisting on the cost-benefit analysis, and timely adjusting and standardizing the Tax Preferences. And then the paper proposes five reform paths, like defining the goals of the Tax Preferences, improving the Tax Preference laws and regulations, establishing the Tax Preferences budget system on the basis of Tax Expenditure, building scientific Tax Preferences Performance Evaluation and Exit Mechanism, and optimizing the structure of the Tax Preferences. Finally, the paper puts forward suggestions for the Tax Preferences reform including promoting the transformation of the Mode of Economic Development and the adjustment of economic structure, encouraging the construction of the harmonious society and the healthy development of foreign-related economy.