Research On The Tax Risk Management Of Coal Industry In China

With the rapid development of Chinese economy and the increasingly complexity of economic environment,the enterprises are faced up with more and more risks in its development.Based on this background,the effective implementation of comprehensive risk management is of great significance for the healthy development of the enterprises,and the tax risk management is an important part of enterprise risk management,directly related to strategic planning and the business decisions and even related to the survival and development of the enterprises.Therefore,the enterprises must be fully aware of the necessity and importance of tax risk management.Besides,in order to promote the rational and orderly development and to obtain lasting market competitive advantage,the enterprises should spare no effort to well achieve effective identification and assessment of tax risk and take effective measures to control the tax risk and establish a scientific system of tax risk management.At present,with the control policy for productive force and a series of factors,the coal price began to pick up since the beginning of 2016.However,the overcapacity and overall performance of the recession are obviously exhibited in the coal industry of China and most of the coal companies are operating difficultly and in the status of loss.At the same time,the coal enterprises are facing heavy tax burden and have to pay many types of taxes during productive operation including value-added tax,corporate income tax,resource tax,water resources compensation,soil and water conservation facilities compensation and other taxes.On the other hand,coal enterprises,especially the state-owned coal enterprises exhibiting administrative management features are lack of consciousness of market risk and tax risk management awareness.And the professionalism of the tax executives needs to be improved.According to the tax burden and tax risk management status of coal enterprises,the tax risk of the coal industry was significantly higher than other industry.Therefore to strengthen the coal industry tax risk management is essential for the healthy development of the coal enterprises.This paper selects a typical coal enterprise,the ABC Company as the research object,initiating a field investigation,to do a comprehensive analysis of influencing factors of tax risk on the targeted coal companies as far as possible.Then the paper is to induce the key factors of influencing the tax risk of the coal industry and to provide possible control measures on the basis of the tax risk research of the ABC Company.The tax risk management guidelines of the large enterprises issued by the State Administration of Taxation(referred to as the "guidelines" hereinafter)indicates the general steps in the tax risk management is to identify and assess tax risk,then to propose the tax risk control measures.To effectively identify and assess tax risk is the premise of the tax risk management.Therefore,this article will follow the "guidelines" recommendations,elaborating on the research of tax risk management in the logical order of the identification of tax risk,tax risk assessment and putting forward the risk control measures.This article firstly focuses on concept of the tax risk,tax risk management and the tools or methods of identifying and assessing the tax risk on the theoretical part.On the basis of relevant theories,the paper then will analyze the specific tax risks of the coal industry and ABC Company.Firstly,this paper uses process analysis to identify the tax risk existing in the process of the procurement and payment,sales of receivables,assets management,and cost management and then to in-depth analyses tax risk types and the possible loss.Secondly,this paper uses tax burden analysis and regression analysis model to comprehensively assess the company's tax risk from two aspects of the company's overall tax risk and subcategories of taxes.To quantify the tax risk,the tax risk is defined as the ratio of corporate tax burden and industry tax burden in this paper and the paper selects 33 listed coal enterprises tax data as the industry tax burden.Thirdly,based on risk identification and assessment of tax risk of ABC Company,this paper uses Delphi method to summarize the key influencing factors of tax risk in coal industry,inviting 10 experts from the tax authorities,professional tax services,coal companies to rate various tax risk factors.The expert evaluation result shows that the defect of the management of invoices,the tax planning failure,defects in the internal control of sales,unreasonable organizational structure,and the deficiency of tax staff competency may be the key influencing factors of tax risk in the coal industry.Finally,according to the industry's key tax risk factors,this paper tries to give suggestions to improve the tax risk management of the coal industry in following four perspectives: 1.To sound organization and management system of the enterprises;2.To improve invoice management;3.To make reasonable tax planning for the coal enterprises;4.To strengthen the construction of the internal control of sales.