Effect Of Preferential Tax Policy For The Western Development On Regional Economy And Performance

Since 2000,the preferential tax policy for the Western Development has carried out more than 10 years,while it played an important role on the regional balance and development.Firstly,economic effect of preferential tax policies is more likely reflect in regional economy on the macro level,such as fiscal revenue change,local GDP growth,investment in fixed assets and industrial structure change.Secondly,at the micro level,enterprise is the practice subject of tax policy.Execution effect directly reflects whether the preferential tax policy has played a positive role.So,could this tax policy will promote regional economic development fast and adjust the industrial structure? Whether it has a positive impact on enterprise performance? Has it produced positive influences to enterprises of different industries as well as small and medium-sized enterprises? It's worth studying how to formulate and implement reasonable preferential tax policies in order to improve enterprise's performance level.Taking Ganzhou city as an example,this paper study the impact of the western region preferential tax policies on regional economy and enterprise performance from macroscopic and microscopic two aspects.From the macroeconomic perspective,because of the influence of international complex economic environment and the national economy downward pressure,Ganzhou city's GDP growth is slowing as a trend every year.The industrial structure constantly improved optimized,foreign investment increased year by year,while fiscal revenue has increased obviously.But the empirical results show that Ganzhou region's economic growth is driven by investment.The effect of preferential tax policy for Western Development to economy is positive but not significant.So it needs a longer time to reflect the preferential tax policy of economic effect.From the micro perspective,using an overall research sample which contained 56 Ganzhou enterprises that enjoy preferential policy and 56 enterprises that did not enjoy the same policy,dated from 2011to2015.Employing a difference-in-differences(DID)estimation method,this paper analyzes the tax effect of preferential tax policy for the Western Development on enterprise performance.The results show that this policy has a positive impact on the scale of the enterprise management,but not obvious on company profit.Comparing the preferential tax effect on performance in the second and third industry enterprises,this paper found that the impact of tax incentives on the second industry enterprises' management scale is greater than the third industry enterprises.Small and medium-sized enterprises are very important in national economy system,so this paper analyzes the effect of preferential tax policy for Western Development to these enterprises performances.The result found the tax policy played a positive role on Small and medium-sized enterprises performance.According to the empirical results,the paper gives some related countermeasures and suggestions to improve and perfect the implementation of the preferential tax policy from macro and micro perspective.