The Impact Of "Replace Business Tax With Value-Added Tax" On The Performance Of Manufacturing Enterprises

The adjustment of tax policy is of great significance to the development of manufacturing.In this process,fiscal and taxation policies bear an important responsibility to enhance the potential of industrial development.Since 2012,China had promoted the reform of “replace business tax with value-added tax”.we set Shanghai to the initial pilot area and steadily implemented to the whole country.Set the transportation industry and some modern service industries to the initial pilot industries,and gradually expanded to the other industry.Finally,China had accomplished the task of “replace business tax with value-added tax” on May 1st,2016.In theory,the reform in the service industry can increase the deduction of input tax for manufacturing industry,reduce the tax burden and improving the performance of manufacturing enterprises.Thus,this paper focuses on the impact of tax policy,with the background of “replace business tax with value-added tax”,which support the development of China's manufacturing industry.This paper use the difference-in-difference method to empirically examine the influence of “replace business tax with value-added tax” on the performance of manufacturing industry,which based on the industrial enterprise data from 2009 to 2013.We found that the performance of test group and the performance of enterprise growth efficiency had been improved.This conclusion gives empirical evidence about the effect of “replace business tax with value-added tax” from the perspective of corporate performance at micro level.On balance,the tax reduction effect of “replace business tax with value-added tax” not only influenced the service industry,but also increased manufacturing enterprise performance significantly,through its deduction chain.In summary,the research on the impact of the “replace business tax with value-added tax” policy on manufacturing enterprises is insufficiency in China,and the research evidence related to corporate performance is patchy too.However Corporate performance is significant for both corporate managers and investors,in the same time,it is critical to business too.If a tax reform policy want to achieve its objectives,such as promoting economic development and adjusting economic structure,its influence must ultimately be applied to micro-enterprises.Thus,it is such important to evaluate the impact of “replace business tax with value-added tax on the performance of China's manufacturing enterprise.The contribution of this paper is mainly reflected in the next two aspects: Firstly,it expands the research on the influence of “replace business tax with value-added tax” in existing literature,which increases the evidence of the impact of reform on the performance of manufacturing industry,and concretely the policy effect of “replace business tax with value-added tax”;Secondly,it enriches the research on the tax burden of manufacturing industry,provides empirical evidence for the policy effect of promoting the development of enterprises and improving the vitality of enterprises by reduce the turn over tax of company,which is conducive to comprehensive analysis.In addition,we give more useful supplement to the existing literature in this paper.