An Analysis Of The Financial Influence That Business Tax Is Converted To VAT On Banking Industry

Since 2011, ministry of finance and the state administration of taxation jointly issued the VAT pilot program in China, the transportation industry and part of modern service industry in Shanghai pilot reform as a starting point, the reform of the tax change VAT has began in China. Banking industry is an important part of the finance sector, as while as the branch of modern service industry, place on the scope of VAT reform has been on the agenda. The current tax system in Chinese Banking industry formed in the "94" tax system, it is improper and the tax burden is heavier, go against to the long development of Banks. It is also unfavorable to improve the international competitiveness of Chinese Banks. The old system can not adapt to the development of the current situation, so Banks join into VAT has its necessity and practical significance. Banking industry, however, as the complexity of the nature of its business and operations, change into VAT still exist certain difficulties, and countries institutions and regulations are deficient in the aspect of the banking VAT. After the VAT instead of business tax of banking industry, the influence of its finance aspect also exist uncertainty, so the selection of the analysis of the influence that business tax converted to VAT on banking industry has certain theoretical and practical significance.Based on the theory of tax neutral and the theory of tax effect and optimal theory for the study of tax, by sorting out and analyzing the research about business tax convert to VAT aspects of domestic and foreign scholars, choose the rate of return on common stockholders’ equity and earnings per share and operation profit of entirety as representation of the bank financial conditions index, choose the actual tax rate of business tax, the actual tax rate of income tax, revenues and operating expenses which business tax convert to VAT will affect as influence variables, and to explore the relationship between these four variables and the representatives of bank financial condition index. From 2007 to 2013 of listed banks financial report as the basis, to collect the required data, descriptive statistics are performed using the statistical software, and then collect samples for analysis and regression analysis. Empirical results show that:the actual tax rate of business tax and income tax are negatively correlated with the rate of return on common stockholders’equity and operation profit of entirety, which means that increasing the two variables will weaken the bank’s operating results. Operating income and operating expenses is negatively correlated with earnings per share, operating income increase will indirectly lead to operating expenses increase which affects the earnings per share. The actual income tax rate is not correlated with earnings per share and the operating expenses is not correlated with operation profit of entirety, which means that these two variables has little effect on earnings per share and operation profit of entirety. The above results show that business tax convert to VAT will affect the bank’s financial condition, combined with the above peroration this paper will puts forward the corresponding suggestions in national policy and bank itself. First of all, government should improve the VAT regulation and system construction, do the preparing policies for the banking industry implement the business tax convert to VAT. Secondly, the bank itself should also focus on the state relevant policies of business tax convert to VAT, do research work and related background talent reserves, promote the reformation of the business tax convert to VAT.