The Impact Of "VAT Replacing BT" On The Performance Of Information Technology Service Industry

The “VAT replacing BT” is one of the important measures that was adopted by Chinese government to reduce tax burden.And it is a milestone in the tax reform process.In November 2011,the government issued “replacing business tax(BT)with value-added tax(VAT)”,and decided from January 2012,put Shanghai as the first pilot area to implement tax reform in the transport industry and some of the modern service industry.In recent years,with the continuous combination with new technologies,new industries,the Information Technology Service Industry(IT Service Industry)which represented by large data,mobile Internet has developed in a fast pace.The Information Technology Service Industry has become an important economic growth point that has promoted the transformation and upgrading of China's industrial structure.The “VAT replacing BT” could solve the repeated taxation of IT Service Industry,which will certainly have a certain impact on its business performance.This paper,firstly reviewed the relevant literatures,and sorted out the related concepts and theories about the “VAT replacing BT” reform as well as the company's business performance.Secondly,analyzed the mechanism of this tax reform on the company performance and analyzed the status quo of IT Service Industry as well as the development process of tax reform.Thirdly,empirical analysis was conducted to specifically study the tax reform effect.In this part,this paper has chosen the data of listed companies of Information Technology Service Industry and the data of some listed companies of Modern Service Industry from 2011 to 2015.Then Factor Analysis method,Matching method,Difference-in-Difference method and Matching Difference-in-Difference method were used to study the impact of “VAT replacing BT” reform on the performance of Information Technology Service Industry.Moreover,based on the analysis of the mechanism and the empirical results,in order to further analyze the factors of “VAT replacing BT” that has influenced the listed companies' performance,this paper chooses the data of the information technology service industry from 2012 to 2015,from the following aspects: change of tax burden,the effect of the deductible effect of fixed assets and the cost of production cost to analyze the direction and size of the influence of “VAT replacing BT” on the performance of listed companies in information technology service industry.It was found that,on the one hand the “VAT replacing BT” reform has improved the overall performance of the listed companies,and in particularly,improved the solvency capability as well as operating capacity;On the other hand,the “VAT replacing BT” reform improved the performance mainly by tax reduction effect and fixed asset deduction effect.The effect of tax reduction on the solvency and operating capacity can be 0.358% and 1.809%,but it has no prominent impact on profitability and development ability.The effect of fixed assets deduction effect on the operation ability and solvency of listed companies in information technology service industry is most obvious.After implementing the tax reform,when the fixed assets purchased by companies increased by 1%,the profitability,solvency and operational capacity of the promotion of the role of respectively 0.006%,0.119% and 0.831%,while the promotion of the role of development capacity is not significant.Finally,according to the empirical conclusion,in order to make the information technology service industry listed companies better enjoy the policy dividend,this paper made some suggestions such as reducing the tax rate and expand the scope of VAT deduction and other proposals to the government,and also made some suggestions such as strengthening the management of value-added tax-related business and appropriately to increase investment in fixed assets and other relevant recommendations to Information Technology Service Industry listed companies.