An Empirical Research On The Impact Of “Business Tax To VAT” On The Financial Performance Of Transportation Industry In China

On January 1st,2012,the State Administration of Taxation began the pilot work of the transformation from business tax to VAT in the transportation industry in Shanghai,In August of 2013,the transportation industry began to implement a nationwide pilot work of the transformation from business tax to VAT,On January 1st,2014,the rail transportation industry was included in the scope.At this point,the transformation was fully accomplished.The transformation from business tax to VAT is not only the need of perfecting the tax system in our country,but also the macro-control means to reduce the tax burden of the transportation industry and promote the development of the transportation industry.In the aspect of theories,this paper has made a comprehensive analysis of the domestic and foreign literature related to the financial performance of the transportation industry,followed by a detailed explanation of the concepts of transportation industry?business tax?VAT and financial performance,and introduced the four major involved theories.Then it selected the profit ability,operation ability,solvency and growth as quantitative indicators of financial performance,made a theoretical analysis of effects on financial performance of listed companies in the transportation industry from two main aspects of tax burden change and deduction effect,and put forward the research hypothesis.In the aspect of empirical study,this paper chose 68 listed enterprises' quarterly financial data from 2014 to 2016 to study.According to the result of descriptive analysis and panel models multiple regression,we concluded the following empirical results:(1)After implementing the transformation of replacing business tax with VAT,there are significant negative effects between the tax burden changes of the overall enterprises and their financial performance.The decrease of tax burden improved the company's financial performance.(2)There are significant promoting effects between the production cost deduction effects of the overall enterprises and their financial performance.The more the production cost is deducted,the greater the promoting effect on the company's financial performance will be.(3)There are not significant promoting effects between the new fixed assets deduction effects of the overall enterprises and their financial performance.At last,some recommendations are suggested from two aspects including policy makers and listed companies of the transportation industry.Policy makers should appropriately reduce the transportation industry VAT rate on the basis of scientific research,so that more enterprises can obtain tax benefits;for the transportation companies whose purchasing bills of fixed assets and tax related information are well preserved,their fixed assets that were purchased before the transformation or already exist when the transformation was implemented should be allowed to deduct the input income tax according to the net value and the remaining depreciation period of the fixed assets.According to the existing policy,the listed companies shall update fixed equipment,strive to improve the technical level of business,do business with general taxpayers of VAT,outsource peripheral business to other company,and constantly improve their own financial management ability.