Solutions And Financial Influence Of VAT Revolution In CMCC

Business tax and add-value tax(VAT)are two of the most important items of taxation in our current turnover tax policy,they are independent to each other and parallel to impose at the same time to form a pattern of the coexistence.In order to build a fair environment of tax-burden and a tax system which is adjusted with the socialist market economy system.Our country started to push the assignment of business tax to VAT instead in Shanghai in 2012.As the experiment spot increased rapidly,the related revolution industry expand from transportation industry to the post industry and the modern service industry.The telecommunications industry was chose the experiment spot in the June of 2014.The three main telecom operators of China published their interim report of 2014 they compatibly contribute their first half year net profit decrease to the business to VAT instead revolution and fierce market competition.The business to VAT instead revolution is originally a structure reduction of tax,according to statistics,by the end of 2015 the early stage of the whole industry tax pilot is 641.2 billion.Now we should focus that the tax-burden has increased in the telecommunication industry,which has a negative effect on the operation of the enterprise.This paper begins with the condition of the business tax replaced with VAT,at the same time it combined with the self-characteristics of telecommunication.I have consulted much literature review and adopted the method of case analysis,using the related data as the foundation.I have analyzed the financial influence of the revolution and compared the different formative factors.More importantly I have proposed some effective solutions.This paper is divided into 6 sections.The first section is the introduction part which talks about the backgrounds and purpose of the research.I also researched the related literature review about the tax reformation,the reformation influence to the enterprise finance and tax payment plan in and out of the nation.As the theoretical basis of the paper,the second section introduce the revenue neutral theory,theory of macroeconomic regulation and control,optical turnover tax theory and tax justice theory which build a necessary and practical theoretical basis for revolution of business tax to VAT instead.I make a brief introduction of business tax,VAT,taxation basis and applicable tax rate,I use the comparison method to make the conclusion that the more division in the industry,the more taxation expense you have to pay in the business tax system.I specify the operating conditions of the existing tax and former tax system,introducing the related conception in the telecommunication industry in the third section.The fourth section is the core part of the paper,I analyzed the detailed revolution influence to the tax-burden,business performance,cash flow and financial rate.I pointed out that there are less deduction for the operating cost,the current operate mode aggressive the enterprise's burden,at the same time the overseas merger and acquisition has a bad effect on the cash flow of CMCC.In order to relieve the pressure the CMCC has faced,I proposed that the company can adjust their management mode,optimize the terminal selling mode,readjust distribute channel strengthen the financial risk management and build a reasonable tax plan to solve the problem.The sixth part is the end section,it is my conclusion and expectation about the reformation,I also pointed out that I have some deficiency in the paper.Although the CMCC is different from other telecom operates in their business game and mode,I incline to emphasize there are the same influence to the telecommunication industry.The telecommunication industry is the fundamental industry for our people's livelihood and national economy.Maintain the healthy development and accommodate with the reform is extremely important to our national telecommunication industry.There are only limited data about the research,the author analyzed the revolution influence to the finance of telecom operates,and then proposed the relevant solutions,it has guiding significance.