Analysis On The Adjustment Of China’s Banking Tax Burden

Banking is the leading social platform for financing and the pillar industry in the financial industry. It is also a core component of the modern service industry and the national economy. The actual benefits of many social and economic subjects are closely related to banking. In more than 30 years, a strong reform wave impetus China’s banking industry to grow and achieve rapid development. At the same time, banking has played a leading role in the development of the majority real economy. Behind these remarkable achievements, when compared with the banking in financial developed countries, China’s banking has many significant gaps. Such as the market size structure, business efficiency, risk prevention and supporting systems. These deficiencies will bring many problems and challenges that China’s banking industry is facing in the development of long-term.Tax burden is an important factor affecting the development of the banking business. When the tax burden bored by the banking industry is in line with its development requirements, it will effectively promote the all-round balanced development of the banking sector and achieve healthy competition between domestic related industries and foreign banking. Making a general survey of China’s banking industry and the current taxes system and tax burden system, we will obviously find, non-neutral business tax is still a large body of banking taxes, there are a number of additional taxes under the tax rate up to 5%, our banking bears the repeating high tax levied; a unified enterprise income tax rate of 25%is formulated in banking and the inadequacy of appropriate tax incentives on project scope and tax deductible rebate have also increased the tax burden on the banking sector. Therefore, to start a new round of reasonable adjustments of the tax burden for China’s banking industry is a key tax issues which needs to get solved currently."Change from business tax to VAT" is a major initiative to be taken in the tax reform of China’s finance in 2015.At the same time, new financial taxes have carried out in some financial developed countries and achieved some success. We follow this line of thought:theoretical analysis-reality analysis-experiences abroad-early reform program design. Through introduce of China’s banking reform process of tax adjustment, we can find that business tax and enterprise income tax play the main roles in tax system. Through the analyzes on the current tax burden level of China’s banking industry with empirical data, we could know that the real tax rate of business tax is far away from the nominal tax rate 5% and the real enterprise income tax is under the nominal tax rate 25%. However, the general real tax rate does not coordinate with the macro-economy, the tertiary and the financial industry because of business tax. The empirical data states the drawbacks that existing in tax burden and these drawbacks make negative influence on banking industry and the other economic subjects. "Change from business tax to VAT" and new financial taxes are the two main ways to adjust the tax burden. But there are many contradictions existed in the process. Then we introduce some beneficial experience from tax reform on banking in financial developed countries.As a summary, it returns to the synthesized perspective of "Change from business tax to VAT" and new financial taxes and than we put forward some valid path choices.