Research On Value-added Tax Management Of Construction Industry Under The Background Of Transition From Business Tax To VAT

Value-Added Tax and Business Tax used to be two of the biggest tax categories in China.In 2011,with the approval by the State Council,the Ministry of Finance and the State Administration of Taxation issued the “Pilot Proposals for the transition from Business Tax to Value-Added Tax”.In January 2012,a pilot program to replace business tax with VAT,only including the transportation industry and part of the modern service industry,was initially launched in Shanghai.Since August 1st,2012,after three rounds of experimental reforms across the country,transportation,telecommunications and part of the modern service industry have been included in the scope of pilot program to replace business tax with VAT.In May 1st,2016,the construction industry,the financial insurance industry,the real estate industry and consumer services were all covered by this reform.So far,the transition from Business Tax to VAT has been fully completed,and Business Tax withdrew from the arena of history.The VAT Reform has not only solved the problem of double taxation under Business Tax system,but also reduced the tax burden of enterprises so as to enable enterprises to invest more money to update technology and equipment;meanwhile,this reform especially has the vital significance to the rapid growth of the economy and optimization of the industrial structure upgrade.But the influence of transition from Business Tax to VAT on enterprise is comprehensive.Compared with Business Tax,Value-Added Tax has characteristics of the strict management,wide tax base and counteraction step by step;therefore,taxpayers,especially those of the construction industry,need to adjust their organization structure,financial management and the management mode to adapt to the new tax system,and fully enjoy the bonus from reforms.Construction industry is a pillar industry in the whole national economy,its output value plays an important part in the Gross Domestic Product(GDP);therefore,it is an important source of tax revenue,and plays an important role in promoting the development of upstream and downstream related industries and various corresponding economy.Under the original tax system of Business Tax,due to its important position and complex organization,the construction industry has always been the emphasis and difficulty of the Local Administration of Taxation management.After the VAT reform,Value-added tax principle determines that its tax calculation is more complex;besides,many policies are newly made,and the State Administration of Taxation have no corresponding experience in construction industry management.Meanwhile,compared with the previous rounds,this round of reform has an important characteristic,i.e.it explicitly proposes that the tax burden of all industries must be reduced.Therefore,on the one hand,the State Administration of Taxation needs to tutor the taxpayers of all industries especially the construction industry in the change from Business Tax to Value-Added Tax,and help enterprises to grasp and flexibly use the related tax policy so as to ensure the reform bonus workable;on the other hand,it also needs to strengthen the taxation management,and prevent the tax evasion left in the vacuum between Value Added tax and Business Tax,and accordingly ensure tax to be all collected.This thesis first introduces the classification and characteristics of the construction industry,and the related theory of transition from Business Tax to VAT;it also analyzes the influence of this pilot reform on the construction industry from the perspectives of positive impact and related challenges.Besides,based on the present situation of the construction industry development in Zaozhuang,the thesis makes a comprehensive analysis on the effect of the VAT reform of the construction industry in Zaozhuang.Furthermore,the thesis particularly introduces the practices of Zaozhuang municipal office,SAT on the construction industry tax management;it also presents the problems arising in this process,and these problems include those left over by Business Tax and the newly emerged ones after the VAT reform.For these problems,the thesis makes a deep analysis from construction industry characteristics,few taxpayer compliance and low tax source management level.Finally,from the perspectives of intensifying inspection,bettering tax service,strengthening the internal management and staying in close collaboration,the thesis brings forward ideas and suggestions for the optimization of the construction management after VAT reform.