Research On The Origin Principle And The Destination Principle Of VAT In China

On May 1,2016,China's Value-added tax(VAT)achieved nationwide and industry-wide coverage.The current VAT in our country is a sharing tax,and share according to The Origin Principle,which has produced some negative effects.This article attempts to study the wealth flow and influence under the current Origin Principle of VAT,and put forward the corresponding reform proposals to promote the return of VAT neutral.This paper finds that the underdeveloped and populous areas are mostly the areas of tax revenue outflow,and the economically developed areas are mostly the inflow areas of tax revenue.Therefore,the current VAT revenue sharing system makes the imbalance of financial resources distribution between the economically developed areas and the backward areas more serious.Regional industrial structure has a significant positive impact on the flow of VAT revenue.The paper use the 2007-2016 city data,estimate the tax flow direction of more than 200 cities in China under the current Origin Principle.And studying the impact of regional tax revenue flow.Then using?China input-output Table in 2012?and China Regional input-output Table:2012?to calculate the local government tax gap under The Origin Principle and The Destination Principle in 2012 under the assumption of complete transfer and incomplete transfer of tax burden,respectively.Based on the existing literature and the reform practice of the EU VAT system under the origin principle,this paper puts forward a new idea of the destination principle,which is based on the mode of "production land collection and management+ consumption land sharing" and takes the third phase of golden tax project as the technical means.To solve the problem of tax transfer between regions of VAT at a lower cost of reform.