TONG Jinzhi，etc：Replacing Business Tax with VAT, Bargaining Power and Tax Burden ——Evidence from Chinese Listed Companies

Abstract：As the indirect tax is easy to shift, the turnover tax paid by enterprises cannot represent their actual tax burden.Thus, we should take tax shifting into account when discussing the impact of “Replacing Business Tax with VAT” on business turnover tax burden.In this paper, we start from the tax shifting, based on the perspective of enterprise bargaining power for the first time, using listed companies data from 2010 to 2012, to research “Replacing Business Tax with VAT” impact on business real turnover tax burden.The findings are as follows.(1)The lower the bargaining power of buyers is, the higher the tax burden changes after “Replacing Business Tax with VAT” will be.However, there is no significant influence on the companies performance among enterprises with different bargaining power of buyers.(2)The lower the bargaining power of suppliers is, the higher the tax burden changes after “Replacing Business Tax with VAT” will be.However, there is no significant influence on the companies performance among enterprises with different bargaining power of suppliers.This paper confirms that companys bargaining power is an important factor in deciding the consistency between the tax policys output and its goal.Therefore, it must take the enterprises bargaining power into account when the government and enterprises make decisions.

Key words： Replacing Business Tax with VAT    Bargaining Power    Turnover Tax Burden

source:Finance & Trade Economics ,No.11,2015