Some Thoughts On Improving The Stamp Duty Of Securities In China

With the steady progress of the overall reform and opening in China,the domestic securities market has made great strides.The multi-level market system covering equity and debt has been initially established,with positive progress made in opening to the world.Various investment products with stocks and bonds as their investment targets have become an important choice for public asset allocation.This puts forward new requirements on the reform of stamp duty system on securities transactions.The legal basis for stamp duty on securities transactions needs amending.The need for stamp duty on securities transactions as a regulatory tool is declining.To better serve the real economy and promote supply-side structural reform,it is necessary to optimize the transaction costs and enhance the price discovery function to better utilize the resource allocation function.Finally,the securities tax system should reduce the income gap and ensure fairness.This paper analyzes the influence of stamp tax adjustment on tax revenue and stock market,refers to the outstanding research results such as the optimization of taxation of securities and draws lessons from the latest securities tax reform experience in the United States and other countries and regions.In the short term,the impact of stamp duty adjustment on tax revenue depends mainly on the sensitivity of the volume to the tax rate.If the tax rate causes a drastic drop in trading volume,the tax revenue will drop.If the time is extended,the stamp duty income on securities transactions mainly depends on whether the market is a bull market or a bear market;when trades are active in the bull market,the market transaction volume increases substantially,and the stamp duty income on securities transactions will increase substantially even at low tax rates.The effect of stamp duty adjustment on the stock market depends on the market conditions.When the market conditions are bullish,and the policy tendencies are squeezing bubbles,its effect on the market index is more effective and the impact is somewhat persistent.In the meantime,the volatility of the market will be increased in the short term,but its effects have obviously weakened over time.When the market condition is a bear market,or an oscillating market and the policy inclination is to stabilize the market,the market turnover will be increased in most cases.However,the impact on the index movements and volatility lacks more consistent results.Finally,lessons,from the latest securities tax reform experience in the United States and other countries and regions,shows that there is no universal one-size-fits-all "one-size-fits-all" model.It requires gradual reform,based on the actual national conditions and the development stage of the securities market.This paper puts forward the corresponding reform orientation and specific policy recommendations,based on the status quo and existing problems of stamp duty in the securities trading in China.It is possible to consider the stamp duty of securities trading out of the stamp tax system and to levy an independent securities transaction tax.The principle of "simple tax system,wide tax base and low tax rate" should be adhered.There are needs to promote the transition of the taxation policy on the securities market from the turnover tax to the income tax.To achieve substantive tax fair,the implementation of differential tax rates and progressive tax rates is needed.