The Study Of The Impact Of The Transition From Business Tax To VAT On The Employment Of Modern Service Industry

On January 1,2012,the Transition from Business Tax to VAT was piloted in Shanghai,and then gradually be rolled out nation-wide.The modern service industry is a new form of service industry that has emerged along with economic development and technological progress.It plays an important role in absorbing employment.The Transition from Business Tax to VAT will effect the employment level of the service industry by inevitably reducing the overall tax burden of the industry and optimizing the industrial structure.Therefore,what impact does the Transition from Business Tax to VAT have on the employment of the modern service industry? What problems exist and how to improve it? This issue deserves discussion and research.This paper firstly introduces the concept and characteristics of modern service industry from the theoretical basis of the impact of the Transition from Business Tax to VAT on the employment of modern service industry,and clarifies the specific industry classification of modern service industry referred to in this paper,and then,from the perspective of change of the relative price of capital and labor,it analyzes the employment effect of taxation,and expounds the way tax affects employment from the aspects of economic development level and economic structure.Then it introduces the employment theory of Keynesian school and supply school,and carries on the analysis of transmission mechanism.Combined with the impact of the Transition from Business Tax to VAT on the modern service industry,this paper analyzes the promotion and inhibition of the policy on the employment of modern service industry.Secondly,this paper introduces the general situation of the Transition from Business Tax to VAT in the modern service industry.It not only introduces the reform process from the perspectives of reform background,reform steps,general taxpayer identification and tax rate adjustment,but also briefly analyzes the impact of the policy on modern service industry's tax burden,industrial structure and invoice management,then analyzes the current situation of employment in modern service industry from the perspectives of total employment and employment structure,and finds that the current total employment of modern service industry in China is increasing year by year and at the same time,there are contradictions between regions and industries.Next,this paper empirically analyzes the impact of the Transition from Business Tax to VAT on the employment of modern service industry.This paper selects the provincial panel data from 2009 to 2017,with the number of employment in the modern service industry in each province as the explanatory variable,and the per capita GDP,fixed Assets investment and other indicators that affect employment levels as a control variable,established a progressive double difference model to analyze the effect of policy.The regression results show that the implementation of the Transition from Business Tax to VAT policy has significantly increased the number of employed people in modern service industry in China.The results of the robustness test not only prove the significance of the regression results,but also show that with the increase of time,the policy has played an increasingly important role in promoting the employment of modern service industry.Finally,the paper comprehensive theoretical analysis and empirical analysis results,and analyzes the reasons why the promotion effect of the Transition from Business Tax to VAT on the employment of modern service industry is greater than the inhibition effect.In addition,this paper also proposes policy recommendations: From the government perspective,perfecting the financial compensation system,expand tax incentives for modern service industries,promote VAT legislation.From a business perspective,accelerate the development of scale,expand service outsourcing,and strengthen the training of financial personnel.