Analysis Of Impact Of VAT Broadening In Financial Industry On The Inner Mongolia Economy And Society: The Empirical Analysis Based On Value-Added Tax CGE Model

The State Council Executive meeting held in March 2016 have decided that the Tax System in China will make the Change from Business Tax to Value-Added Tax all over the country since May 1,2016.The Department of Construction,real estate,financial services and part of Services will be all included in the system of value-added tax.This reform is of great significance.The financial industry,which is closely associated with other sectors of the nation economy,is the key areas of the national economy,and plays an irreplaceable role in the whole economic operation.The financial industry includes many types of its business,and the added value is difficult to determine.So some challenges are existing through the reform course.Inner Mongolia autonomous region is characterized by natural resources.he third industry like financial industry’s development is relatively weak.But,as the law of value-added tax will be applied across the country,it is worthy to discuss how to evaluate its impact on economy and society.In this paper,the Change from Business Tax to Value-Added Tax in financial industry in the region of Inner Mongolia was taken as the research object,the Macro and Micro Social Accounting Matrix on the Data Basis of 2012 input-output table in Inner Mongolia and other statistical informations was introduced and the GAMS program language was used to simulate the impact of the Change from Business Tax to Value-Added Tax in financial industry on economy and society.The simulation results showed that the Change from Business Tax to Value-Added Tax in financial industry can lower the tax burden,especially in the condition of all the departments Value-Added Tax payment.This tax reform can also promote the outputs in the upstream and downstream industries.If only the financial industry pays the Value-Added Tax,the tax reform will bring bad influences on the GDP,Regional Employment and Residential Welfare.But when taxpayers across all industries pay the Value-Added Tax,the changes can make positive impact.