Gao Peiyong: Functional Orientation and Foreseeable Prospects of ‘Turning Business Tax into Value Added Tax’

Abstract: This paper analyzes the actual and potential significance and influence of “Turning Business Tax into Value Added Tax” (TBT-VAT), based on which its function orientation and foreseeable prospects are defined and outlined. The analysis shows that from macroeconomic perspective, TBT-VAT is not only a fundamental measure to improve current circulating tax system and an important means to promote economic structural adjustment, but a move closely relevant to the effects of macroeconomic regulation and control as well. From the perspective of deepening comprehensive reform, "TBT-VAT" will boost both the reconstruction of main local tax and the local tax system and the building of a direct tax system. It is likely to force the restructuring of the tax-sharing fiscal system and a new round of comprehensive reforms, which include economic construction, social construction, political construction, cultural construction, ecological civilization construction and party building.

Keywords: Turning Business Tax into Value Added Tax (TBT-VAT), Structure of the tax system, Economic structure, Fiscal and tax reform, Comprehensive reform

Source: China Finance and Economic Review, Volume 2, No.2, 2013