Research On The Impact Of The "VAT Reform" On The Financial Management Of City Commercial Banks And Countermeasures

As the most important part of the financial industry,commercial banks are closely related to many industries.Under the background of the gradual integration of China's financial industry and the international financial market,the growth rate of China's commercial banks' net profits is decreasing day by day.The business tax system of the banking industry has been incompatible with the development needs of economic globalization,and input tax cannot be deducted.The value-added tax chain is interrupted,leading to double taxation.Besides,the tax burden is aggravated.All of these challenges seriously affect the innovation ability,competitiveness and speed of the national economic development of the banking industry.Therefore,it is imperative to reduce the burden on banks by taking the opportunity of replacing the business tax with a value-added tax.With the implementation of the policy of “replacing business tax with value-added tax” in China on May 1,2016,the financial industry was officially included in the scope of VAT collection,which also means that the collection of business tax by banks has become a "history".Thus,commercial banks will face unprecedented opportunities and challenges.Although the gap between urban commercial banks and large state-owned commercial banks has been shrinking year by year,defects such as small operation scale,large geographical restrictions on business scope,relatively high tax burden and poor risk resistance still exist.Therefore,the reform of "replacing business tax with value-added tax" tax system brings greater challenges and impacts to urban commercial banks.Now,the reform of "replacement of business tax with value-added tax" has been fully implemented for more than two years.If urban commercial Banks successfully seize the opportunity of tax reform,they can greatly diminish the negative impact and improve their competitiveness.On the contrary,if urban commercial Banks ignore the adverse effects of reform and do not take countermeasures in time,they will face many problems,such as the reducing revenue,the increasing costs,the decreasing growth of net profit,the increasing tax risks and the insufficient input tax deduction.Therefore,the impact of "replacing business tax with value-added tax " on financial management is stilla major research for urban commercial Banks,which requires a further study and discuss based on their own reality.This paper takes the impact of replacing the business tax with a value-added tax on the financial management of urban commercial banks as the main line of research,and takes M bank,an urban commercial bank,as the research object.On the basis of fully understanding the relevant theories and the international banking tax model,the first-hand data of M bank in the two years since the reform of replacing the business tax with a value-added tax are obtained.According to its own actual development,from the perspective of financial management,study on the impact of "replacing the business tax with value-added tax" on the income,cost,net profit,tax burden and other aspects of the bank.Finally,based on the discovery of problems and analysis of the impact,corresponding solutions are proposed.