Research On Policy Effect And Optimizstion Of VAT Revenue Sharing

The report of the 19 th National Congress of the Communist Party of China proposed that the primary goal of fiscal and tax reform should be the reform of the fiscal relationship between the central and the central regions.It is necessary to form a central income sharing system with Chinese characteristics,which is mainly based on shared tax with reasonable sharing,supplemented by exclusive tax with scientific division.In China's existing sharing taxes,value-added tax is the largest tax category,and the comprehensive reform of the VAT replacing business tax brings another important change in the distribution of tax revenue between governments: the full expansion of the VAT tax base,the declining tax rate,and the transitional adjustment of the proportion of VAT revenue sharing between central and local governments.And the introduction of the transition plan for VAT revenue is mainly to cope with the impact of the comprehensive reform of the VAT replacing business tax on local finance and maintain the local financial resources.However,whether the transition plan can achieve its original policy intentions,what policy effects will be generated in the actual sharing process,and will these tax system changes have an impact on the financial interests of local governments and the enthusiasm for economic development,causing changes in the taxation behavior of local governments,and ultimately affect the fiscal relationship between governments?On the occasion of the implementation of the transition plan for VAT revenue division in the past three years,this paper starts from the theoretical level of the VAT revenue sharing system,and combines the VAT income sharing process in China to analyze the system's shortcomings and deficiencies.Proved by data measurement and empirical analysis of two-way fixed effect model,the principle and goal of the vertical distribution ratio of VAT revenue in vertical sharing are not specific and long-term,which is not conducive to the balance of financial allocation structure among regions.Based on the “origin principle” in horizontal sharing,the problem of taxation and tax sources deviating from each other will increase the tax burden of most provinces in the central and western regions,resulting in unfair tax burdens between regions.At the same time,there is a significant causal relationship between the change of tax structure between VAT and business tax and the structure of economic industry,and the increase of the proportion of VAT sharing will significantly increase the proportion of industrial added value to GDP.In view of the current problems,based on China's national conditions and drawing on international experience,this paper also puts forward corresponding policy recommendations: in the short-term,the regions with financial difficulties,which are affected by the comprehensive reform of the VAT replacing business tax and sharing policies,can be given the right to make reasonable feedback to the central government.However,in the long-term,the vertical sharing of VAT revenue should be further reasonable,it is necessary to clarify its long-term goals and principles,and achieve linkage with financial powers and expenditure responsibilities through “forming sharing”,to achieve the goal of “determining revenue by expenditure " at all levels of finance;finally,the horizontal sharing of VAT income needs to gradually change the previous "origin principle",through the clearing center of VAT transfering,to share the really burdened VAT revenue according to the "destination principle".