After replacing business tax with value-added tax, even if this part of the tax will still belong to local governments, due to the impact of tax cuts, the revenue scale of local governments will also be reduced, which will easily further increase the gap between central and local financial power and The asymmetry between powers.

In order to solve this problem, it is necessary to reform the domestic VAT sharing ratio. After calculation, regardless of whether tax revenue changes after the reform, the new central sharing ratio will depend on the ratio of domestic VAT before the reform to the sum of domestic VAT and local-level business tax. Since the tax structure of each province is different, the ratio will be between 36.10% and 62.32%, with the median being 51.20%. If calculated based on national data, the value will be 51.12%. Of course, the new central sharing ratio cannot be the minimum value, and local governments with a large proportion of business tax will bear certain reform losses. Without affecting the uniformity of sharing standards, the central government needs to take other fiscal measures to make up for the reform losses of these local governments.