Calculating The Impact Of The Real Estate Taxes Reform For Local Government Revenue

As a kind of property tax, real estate tax play a major role of fiscal and tax revenue of local government in many countries, it constitutes an important part of local tax system. In June 2014, the telecommunications industry will be brought into the range of the experiment on changing the business tax to the valued-added tax, as the main source of local tax revenue, the business tax will be replaced by the VAT, which means in our country, the local will share more tax revenue with central government, this will be a great shock to tax system of local government. in 1994, revenue-sharing-scheme reform established the tax authority scope between local and central government, but in recent years, with the deeply reform on changing the business into the VAT, the gap between the obligation and tax authority of local government becomes bigger and bigger, which lead to the tax revenue of local government cannot support its fiscal expenditure, so the local government have to raise funds through the land finance to ease the financial pressure, even so, a majority of local government fall into serious debt crisis. In addition, the long-term land finance lead to a rapid growth in the real estate market, prices gradually rise, the growing pressure of purchasing a house have already seriously affected the basic living conditions of the residents. According to foreign experience, real estate tax has become stable and long-term fiscal revenue of local government, while in our country, due to lots of irrational phenomenon in the real estate market, the growing house price and the growing pressure of purchasing house, the government began to reform the real estate tax in 2011, but so far, the only function of the real estate tax is to control the rapid growth of house prices, which was not designed to improve the local tax system. How to improve the financial structure of local government revenue, increase tax revenues of local governments is a big problem needed to be solved soon. Researching on the real estate tax is practically significant for solving the possibility of being a major tax for real estate tax, which can settle the fiscal problem.This article is based on our irrational phenomenon of real estate market and the status of the expenditure over local government revenue, focus on the status of real estate tax reform. According to the experience of real estate tax reform in foreign countries, setting the real estate market of Nanchang as an example, it want to proof the possibility of real estate tax becoming a major revenue resource of local government and the impact of real estate tax for local government revenue. At last, the article provides corresponding suggestions for how to implement real estate tax reform. The following is specific suggestions.The first part is based on the background of changing the business tax to the VAT, and then point out the significance of this research, it expound the relationship between the real estate tax and local revenue in domestic and foreign countries, especially the research on benefits and harm of the real estate tax reform, the possibility of being local tax, and the impact to the local revenue. This part also indicates the innovation and weak points. The second part describes the development of the real estate tax reform and its future trends. through the introduction, which leads to the current real estate tax reform work, followed by preliminary designing the direction of the real estate tax reform, such as the object of taxation, tax range, tax basis, tax forms, etc. The third part designs the scheme of real estate tax reform, which specifically describes the taxation principle, taxation object, tax range, tax basis, and tax forms, in order to design different scheme of real estate tax reform. The fourth part is the most important part of this article, the current research on real estate tax in domestic research mostly are theoretical research, which had not actually measure the impact of real estate tax reform for local revenue, the fourth part of this article will set Nanchang as an example, According to the different scheme of real estate tax in the third part, through specifically measuring out the rate of real estate tax revenue in local revenue, and tax burden level to the residents under different scheme of real estate tax. The fifth part is a summary of the above analysis and recommendations. At first, it summarizes the analysis of part IV, including the possibility of being the major resource of local revenue, the impact of real estate tax for local revenue, as well as whether the real estate tax can change the dilemma of local government debt. The second is proposing suggestions for the future real estate tax reform. Real estate tax reform should pay attention to protecting the interests of the residents, design reasonable tax rates and relief range, improve real estate registration system, establish and improve the housing assessment and management system to ensure calculating the value of house reasonably within the scope of taxation. In addition, enduing tax authority to local governments is a essential part of real estate tax reform, under the long-term condition of difference between obligation and tax authority, which need to build a new system of local government finance and taxation to solve the increasingly prominent revenue deficits problem, and by the above analysis, In the short term, the revenue scale of the property tax is still not enough to make up the gap of the business tax and local tax income,but in the long run, during the scope of tax and the tax base expanding, property tax may be the support of local taxes, which will also constitute an important part of local government finance and taxation system.