Title: Size,Structure and Efficiency of Tax Preferences of the Indirect Tax: Empirical Evidence from National Tax Survey
Abstract: Using the data from the national tax survey which have rich information about tax preferences from the indirect tax,this paper estimates the size of tax preferences of value-added tax and sales tax.Then we study the structure of these tax preferences from various views of policy purpose,industry type and firm ownership,and analyze the effects of the indirect tax preferences by using two important policies as example.Our findings are as follows.Firstly,the size of these tax preferences in China is huge,which is over 8 percent of GDP,and it will endanger unification of tax system.Secondly,to some extent,the tax preferences are tendentious.Preferences from value-added tax mainly support rural industry and environment protection,and mainly go to taxpayers in some industries like wholesales and manufacture of chemical raw materials and products,while those from sales tax are aimed at raising efficiency of fiscal funds,and the beneficiaries are concentrated in the third industry.Meanwhile,the main beneficiaries of the tax preferences from the indirect tax are state-owned and foreign firms.The tendency above has both the positive effects that improving people's livelihood and promoting change of economic development mode,and the negative impacts like exacerbating tax burden disparity and obstructing fair competition between firms.Thirdly,the tax preferences not only stabilize price and stimulate market transactions,but also aggravate the middle and small firms' disadvantage in development.Our study helps to open the black box of tax preferences of the indirect tax,and provide the basis for governments' better management on tax preferences.
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
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Cited By Count: 2
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