On October 30, 2017, the State Council executive meeting passed the "State Council's Interim Regulations on the Abolition of Business Tax" and the revised decision (draft). Although on May 1st, 2016, when the “competition reform” began a comprehensive pilot, it was known that this day will come, but when it comes, it is still somewhat emotional.

China's business tax refers to the turnover tax levied on a basis of the price of goods or services. The business tax translated by foreign countries, especially in many European countries, is actually our value-added tax. From the historical point of view, the "Shanze tax" in the "Nine Fus" of the Shang Dynasty has the shadow of business tax, and the term business tax was officially used during the Republic of China.

After liberation, China collectively referred to business tax and income tax as “industrial and commercial tax” in 1950. In 1958, it merged turnover tax and stamp duty into “uniform industrial and commercial tax”. In 1973, some small taxes were further merged into “industrial and commercial tax”. The name of the business tax was officially issued under the Business Tax Regulations (Draft).

As China's value-added tax changes from production to consumption, the cancellation of business tax is a historical necessity.

First of all, from the perspective of enterprise production and management, the way of VAT chain deduction is more conducive to socialization than the business tax.

Because each part of the business tax trade must pay a business tax, and the value-added tax can be deducted from the chain, each link only uses the value-added tax on this link, only the final consumer of the product needs 17% of the total price of the product. Burden the tax. Therefore, although the tax rate of the main products of VAT is 17%, the VAT tax (paid VAT/sales) in each industry is only 1-2%, which is much lower than the 3-5% business tax. For example, the same 100 yuan product is sold to consumers after six environments and finally 150 yuan. The business tax is taxed (100+110+120+130+140+150)×5%=37.5 yuan, and the value-added tax is 150×17%=25.5 yuan. .

With the development of today's society, the social division of labor is becoming more and more detailed and more professional. If you pay business tax, you must reduce the intermediate link as long as you have the conditions to reduce your tax burden. If you pay VAT, then Conditions must be outsourced in the middle of no advantage, in order to highlight their comparative advantage to obtain more profits. Therefore, from the perspective of social development, VAT alternative business tax is the inevitable result of social development.

Second, from the perspective of tax equity, VAT is more fair than business tax.

Because the sales cost ratios of different enterprise materials (raw materials (including rent)/sales) are inconsistent, the unified tax rate based on sales will make the turnover tax of enterprises with high sales cost account for a lower proportion of profits, which will affect to some extent. Tax fairness.

For example, it is also catering. The street flies have a small profit and small sales route. The material sales cost rate is 70%, the profit rate is 10%. The high-end hotel pursues single product profit, the material sales cost rate is 50%, the profit rate is 20%, and the sales of both parties are consistent. All of them are 10 million, which are completely declared according to sales. Then the business tax of the fly house is 500,000, the profit is 1 million, the turnover tax is 50%, the sales tax of high-end hotel is 500,000, and the profit is 25%. The gap between the two sides is 100%.

The same data uses VAT, assuming that all costs can be obtained for VAT special invoices, flies restaurant VAT 300 × 6% = 180,000, profit of 1 million, turnover tax accounted for 18% profit, high-end hotel VAT 500 × 6 %=300,000, profit 2 million, turnover tax accounted for 15% of profit. The gap between the two sides is 20%.

However, this fairness of value-added tax is only relatively fair in the field of turnover tax. In this taxation system, the value-added tax only achieves fair rate rather than tax fairness, because the final bearers of all taxes are final consumption. By. Assuming that an individual purchases all goods with a VAT of 17%, then:

A person who earns one thousand a month goes to buy necessities, and there is no savings. His value-added tax is 17%;

A person with a monthly income of 10,000 consumes 5,000 yuan a month, and a savings investment of 5,000. His value-added tax ratio is 8.5%. ;

A person with a monthly income of 100,000 yuan consumes 20,000 a month, and a savings investment of 80,000. His value-added tax ratio is 3.4%.

As can be seen from the above description, the lower the income, the higher the proportion of VAT to income. The personal income tax is the excess progressive tax rate, and the higher the income, the higher the tax rate.

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