"To Replace Business Tax With Value-added Tax(WAT)" Effect On The Local Finance Income And Its Countermeasures

After entering the 21 st century, China's economic development has made remarkable achievements. However, a few social contradictions occurred at the same time. Air quality is becoming more and more worse, diet health problems emerge in endlessly, has become an increasingly important problem such as corporate tax burden is heavier. The problem in the economic field is China's current economic structure can't meet the requirement of economic development now, so the solution is to adjust our country's current economic structure urgently, in order to look for a more stable and healthy economic growth. As an important factor in China's economic structure, the third industry plays a more and more important role in economic development, which is valued by the Chinese government. "Business Tax To Value-added Tax" is aimed at promoting the development of the third industry. Our country imposes value-added tax in the second industry except construction industry, however business tax in the majority of the third industry.Since "Business Tax To Value-added Tax" is to reduce the tax burden of enterprises, which will pay less tax in this reform. The main source of national finance income is to tax on production, sales, and behavior of enterprises. If "Business Tax To Value-added Tax" is carried out in the whole country, the revenues of national fax and local fax will fall together. As a result of the policy of tax reform, the main part of local tax will disappear, so the local government should assume more expenses if enjoying the same portion ratio in value-added tax. All the influence was confirmed in the feedback information of pilot areas. According to the above problem, this paper puts forward some solutions. This article takes Hanyang district in Wuhan city, Hubei province as an example, records the response of local government, and analysis on financial data around "Business Tax To Value-added Tax". The author hopes these measures for "Business Tax To Value-added Tax" can successfully play a positive role in the national implementation.