Tax Policy Research To Agricultural Products Processing Enterprises Of China

Issues of agriculture, farmer, and rural area are priority of national economy and social development. The 2015 government report expressly proposed the guarantee of grain safety and highly efficient agriculture. Agricultural products processing enterprises are the leading players in modern agriculture and also the core of agriculture industrialization. Agricultural products processing enterprises are important approach to agricultural development and ensuring farmer’s income and strategic method of expanding agricultural industrial chain and satisfying diversity of produce. At present, China’s agricultural products processing enterprises are expanding the size and gaining a certain effect but there is still certain gap with developed countries. The development of agricultural products processing enterprises is affected by many aspects such as raw material, market, and economic policy among which tax policy is the important method to support agricultural products processing enterprises. In China, the current tax policy of agricultural products processing enterprises needs improvement in strength and width. The support for agricultural products processing enterprises is not enough nor well-targeted. Therefore, further adjustment and improvement are needed for the preferential policies of tax for agricultural products processing enterprises.This paper applied panel model, time series analysis, and case analysis and summarized problems in aspects such as value-added tax, tariff, and income tax of agricultural products processing enterprises in China based on tax policies of agricultural products processing enterprises at different stages. It made reference for related experience of tax policy of agricultural products processing enterprises in America, EU, Japan, South Korea, and other countries with suggestions to improve tax policies of agricultural products processing enterprises in China.The main research conclusions are as follows:First, tax policy that supports China’s agricultural products processing enterprises is based on related theory and reality. Imbalanced growth theory, theory of priority development of leading industry and department, development pole theory, revenue idea, and the public goods theory of supply-side economics provide theoretical basis for agricultural products processing enterprises.Characteristics of the present situation, status in national economy, and the gap with developed countries of agricultural products processing enterprises are realistic basis.Second,the support of tax policy for agricultural products processing enterprises has gained certain effect. From 2003 to 2012, produce processing companies increased by 3% in number. From 2003 to 2011, the average growth rate of total value of output of annual produce processing industry is 24.39% which is beyond the growth rate of national economy. However, for the existing problems in agricultural products processing enterprises, a sound market and the adjustment and support of tax method are needed.Third,China’s current tax policy of agricultural products processing enterprises mainly include value-added tax, tariff, and corporate income tax. This paper summarized drawbacks of tax policy through policy analysis of three stages such as ambiguity of produce scope and standard definition, inconformity of tax rate of value-added tax and narrow preferential scope of favorable income tax. It also applied BCG matrix to analyze tax incidence rationality and the effect of tax supporting policy of agricultural products processing enterprises.Fourth,tax policy of Agricultural products processing enterprises in America, EU, Japan and South Korea has formed full system, provided sound financial service system, tilting tax policy, and diversified tax preference method. Tax preference method will adjust along social and economic change. Improved tax policy supporting system promotes rapid development and continuous innovation of agricultural products processing enterprises in these countries and brings high benefits.Fifth,through case analysis, the current tax policy has positive effect. 1) Agricultural products processing enterprises are growing in number, size, and various indexes of development;2) Tax incidence of agricultural products processing enterprises will decrease annually and enjoy tax preference to different degrees and strong profitability; 3) Development of agricultural products processing enterprises will indirectly promote rural economy, farmer’s income and employment.Sixth,according to drawbacks of tax support of agricultural products processing enterprises in China and experience of developed countries, China should improve tax policy in the following aspects: strengthening tax preferential policy, exploring and innovating tax preference method, and further improving tax policies such as value-added tax, tariff and corporate income tax so as to promote economic benefits and new normality of economic development of agricultural products processing enterprises.