The Effect Of VAT Rate Adjustment On Chinese Automobile Manufacturing Tax Burden

At the two sessions held in 2022,China wrote "enhancing the core competitiveness of manufacturing industry" into the government report for the first time and took it as an important focus of policy.This is because manufacturing industry is the embodiment of China’s comprehensive national strength,creativity and competitiveness,which not only provides the material basis for China’s industrial society,but also provides equipment and technical support for the information age.The value-added tax rate has been reduced several times in recent years.In 2017,the four tax rates were reduced to three.In 2018,the 17% tax rate in manufacturing and other industries was reduced to 16%,and in 2019,the tax rate was again reduced to 13%.As the automobile manufacturing industry,which occupies an important position in the manufacturing industry,the development trend in recent years has been good,and its scale has been expanding,but at the same time,there are still problems such as high tax burden and new competitiveness to be cultivated.This paper mainly studies the impact of the reduction of value-added tax rate on China’s automobile manufacturing industry,and puts forward reasonable countermeasures and suggestions to improve China’s value-added tax system and promote the high-quality development of the manufacturing industry.This paper describes the theoretical basis,the mechanism of action,the reform process of value-added tax rate,the development status of automobile manufacturing industry,empirical analysis and countermeasures.Firstly,it defines the VAT rate,automobile manufacturing industry and tax burden,expounds the theoretical basis of Laffer curve,tax neutrality and tax excess burden,and analyzes the mechanism of the impact of VAT rate adjustment on China’s automobile manufacturing industry;Secondly,this paper analyzes the course of VAT rate adjustment,the development status of China’s automobile manufacturing industry and the current situation of the value-added tax burden of the automobile manufacturing industry.The adjustment process of value-added tax rate is mainly divided into three stages: the reform of tax system in 1994,the reform of "replacing business tax with value-added tax" and the deepening of value-added tax reform.The applicable valueadded tax rate in each stage is analyzed.The current situation of value-added tax burden in automobile manufacturing industry is analyzed from three aspects: overall tax burden,tax burden structure and comparison with the industry;Thirdly,after sorting out the relevant data of automobile manufacturing industry,90 listed automobile manufacturing enterprises were finally selected as the research sample.In this paper,the tax burden of automobile manufacturing enterprises is selected as the explanatory variable,the value-added tax rate as the core explanatory variable,and the operating cost rate,enterprise size,fixed asset input and enterprise bargaining power are added as the control variables.The fixed effect model is constructed for descriptive statistics,collinearity analysis,Hausman test,empirical regression and robustness test.During the empirical research,this paper found that the reduction of VAT rate has a positive impact on China’s automobile manufacturing industry,which can significantly reduce the tax burden of China’s automobile manufacturing industry.And the reduction of tax rate in April 2019 is more obvious than the reduction of tax rate in May 2018.However,compared with other sub-industries of the manufacturing industry,the tax burden of China’s automobile manufacturing still has a higher tax burden,and there is a certain space for tax reduction.The research results also found that the tax burden of the automobile manufacturing industry is also significantly related to the operating cost rate,enterprise size,fixed asset investment,etc.,but the bargaining power of enterprises needs to be improved,which is more conducive to reducing the tax burden of enterprises.Finally,according to the empirical research results,the paper summarizes the full text,and puts forward countermeasures and suggestions according to the above theoretical and empirical analysis.Firstly,we need to further improve the VAT system and reduce the VAT rate in manufacturing industry.Secondly,it is necessary to improve the supporting facilities of VAT reform and promote the transformation and upgrading of the automobile manufacturing industry.Thirdly,we should actively innovate methods of collection and management supervision and strengthen our tax supervision.Moreover,the automobile manufacturing industry should actively and reasonably use tax planning to deal with the policy adjustment in various ways;Finally,enterprises should enhance their bargaining power and enjoy more favorable policy dividends.