Research On The Effect Of Construction Industry’s Turnover Tax Burden Due To Replacing The Business Tax With A Value-added Tax

The turnover tax burden system in China has experienced a long era of change.With the development of economy and transformation,the turnover tax also plays a different role in different periods.Replacing the business tax with a value-added tax as an important part of tax system structural reform,has a huge influence to all lives in China.Since May 1 of 2016,construction services and financial services,the real estate industry,life service no longer pay business tax.Construction as the last of the reform object,because of the complexity of its industry structure and the importance of the impact on the economy,has been the focus of national attention.I choose the construction industry as the research object in this paper.Combining the theory of new public management theory and tax theory,this paper introduces the construction industry before replacing the business tax with a value-added tax in our country.Considering the characteristics of construction industry itself and the state of the industry,based on the analysis,this paper make clear the necessity of reformation in order to make a deeper understanding of reformation’s implementation of the actual influence of the construction industry.Because of the policy implementation in the middle of 2016,most of the analysis is from the Angle of the forecasting research.This paper taking T city of Jiangsu Province as an example analyze the specific data obtained from the local construction industry.At the same time,through the establishment of mathematical model,this paper analyze reformation.First of all,tax rates directly increase will inevitably affect the enterprise tax burden.Secondly,the higher the rate of deduction of the outsourcing items,tax is lower.Currently,calculation is the more you have deduction,the less tax you have to pay.But not all construction industries can obtain sufficient input offset.Thirdly,this problem is mainly because the policy has not been perfect.Last but not least,if the purchased goods and services has the lower the proportion of revenue,companies will have less deduction.This paper with the data and model indicates reformation of the influence of the construction industry.Results show that the tax rate of T city’s construction industry as a whole after the reformation is declining.But there are some industries’ increasing due to a lot of factors.Considering the real economic impact,this paper gives some advice to help enterprises benefit from the development of economy.This paper argues that not only the government should perfect the tax policy,expand the scope of the deduction,improve the measures,optimize industrial structure and so on,but construction companies also need choose the appropriate taxpayer identity,strengthen enterprise management,choose the reasonable way of tax,and adjust tax obligations.