Comparison between production value-added tax and consumption value-added tax
Value-added tax is a kind of turnover tax, and the amount of goods sold or taxable services and imported goods by units and individuals who sell goods or provide processing, repair and replacement services and import goods in China is calculated and taxed, and a tax deduction system is implemented. In terms of taxation, value-added tax is to tax the added value of goods in all aspects of commodity production and circulation, so it is called "value-added tax". However, in practice, it is difficult to accurately calculate the added value of commodities or the added value of commodities in the process of production and circulation. Therefore, China adopts the internationally common tax deduction method, that is, according to the sales of goods or services, the output tax is calculated at the prescribed tax rate, and then the input tax paid when the goods or services are obtained is deducted, and the difference is the taxable amount of the value-added part. This calculation method embodies the principle of tax calculation according to value-added factors.
"Productive" value-added tax means that when calculating value-added tax, it is not allowed to deduct the price of any purchased fixed assets. As the legal value-added of tax basis, it includes not only the newly created value of taxpayers, but also the purchase price of fixed assets. From the macro-economic point of view, this base is roughly equivalent to the statistical caliber of gross national product, so it is called "production-oriented" value-added tax.
"Consumption-oriented" value-added tax means that when calculating the value-added tax, the price of fixed assets purchased in the current period is allowed to be deducted at one time, and the legal value-added amount is used as the tax basis, which is equivalent to the balance of all taxpayers' sales in the current period after deducting the price of all purchased means of production. From the macro-economic point of view, this tax base is only equivalent to the value of consumption means, so it is called "consumption-oriented" value-added tax.
From a purely financial point of view, "production-oriented" value-added tax is not allowed to deduct the input tax obtained by outsourcing fixed assets, while "consumption-oriented" value-added tax is allowed to deduct the input tax obtained by outsourcing fixed assets.
On the inevitability of the transformation of value-added tax from production to consumption.
From 65438 to 0994, China implemented the reform of fiscal and taxation system according to the requirements of market economy. In view of the specific situation at that time, it chose the "production" value-added tax system. Over the past fifteen years, the "productive" value-added tax system has made positive contributions to the development of China's market economy, especially to promoting fiscal revenue and enhancing the macro-control ability of the central government. However, as far as its overall development is concerned, it has been difficult to meet the needs of reform and opening up, and some disadvantages have gradually emerged, which has hindered the sound and rapid development of the national economy. It is really necessary to turn to a more scientific and reasonable "consumption-oriented" value-added tax.
(A) "Production" VAT has the phenomenon of double taxation.
Under the "production" value-added tax system, when an enterprise purchases fixed assets, the input tax it obtains cannot be deducted and can only be included in the cost of fixed assets. Therefore, when calculating the value-added tax payable in the current period when purchasing fixed assets, it is necessary to pay more taxes because the deductible part is less. In each period after the fixed assets are put into use, the input tax, which has been included in the cost of productive fixed assets, enters the product cost of the enterprise through gradual depreciation. The product cost of an enterprise, together with an appropriate profit, constitutes the sales price of the enterprise's products, and the output tax should be calculated according to the sales price and the corresponding tax rate. From this perspective, the phenomenon of double taxation is widespread in the "productive" value-added tax system.
(B)' production' VAT inflated product costs
As mentioned above, the input tax of productive fixed assets purchased by enterprises enters the product cost through depreciation, but the value-added tax belongs to the "extra-price tax", and the tax burden can finally be passed on to consumers through circulation, that is, this tax burden is not borne by the production enterprises, but is included in the product cost on the books, which makes the cost inflated and distorts the most important signal of the market economy-the price formation mechanism. If these goods are used for export, their competitiveness in the international market will be weakened by rising prices. According to the principle of "how much is paid, how much is refunded", all taxes paid by export commodities in circulation are refunded to ensure zero tax rate, but the input tax on fixed assets that enter the product cost through depreciation cannot be refunded.
(3) The "productive" value-added tax system makes the enterprise's financial accounting too complicated and the tax collection and management more difficult.
Under the "production-oriented" VAT system, enterprises need to deal with the VAT input tax obtained by purchasing goods or services according to the different nature of economic business. For example, if an enterprise purchases a batch of raw materials, from a financial point of view, because it is not a fixed asset project, the input tax amount obtained can be used as a deduction. However, if these raw materials are used for fixed assets in future economic activities, for example, enterprises need to transfer out the VAT input tax corresponding to the procurement cost of these raw materials and include them in the cost of self-built fixed assets. In real life, the budget of fixed assets built by enterprises cannot be very accurate. If it is underpaid, it needs to continue to be levied, and the corresponding input VAT will continue to be transferred out. If it is overpaid, the overpaid part needs to be returned, and the corresponding transfer-out input tax needs to be reversed, which can be used for further deduction in the future. In this case, the enterprise finance must continuously handle the VAT input tax between transfer-out and transfer-back, so as to ensure the correctness of financial accounting. If the internal control of the enterprise is not strict, the financial department may deduct the input tax when collecting raw materials, but in fact, this part of raw materials is used for fixed assets projects, which objectively leads to an increase in deduction and a decrease in tax payable. And a few enterprises and financial personnel with ulterior motives will use this method to evade taxes.
Based on this, the difficulty of tax collection and management has also increased accordingly. In order to accurately calculate the tax payable of enterprises, tax officials need to check the accounting books and records with economic activities one by one. In real life, although accounting books need to be preserved for a long time, the economic activities recorded by them may have already ended, and it is more difficult to correspond one by one.
(D) The "productive" value-added tax system is not conducive to the adjustment of China's economic structure.
The Central Economic Work Conference in 2008 proposed that the main focus of economic work in 2009 should be "maintaining growth, expanding domestic demand and restructuring". In the process of structural adjustment, both high-tech industries and basic industries such as energy, raw materials, transportation and environmental protection need a lot of investment in infrastructure construction. However, under the "production type" VAT system, the input tax on fixed assets purchased by enterprises cannot be deducted, which leads to the unreasonable phenomenon that the more fixed assets are purchased, the heavier the current tax burden will be, which will greatly dampen the enthusiasm of investors, and then hinder the equipment renewal and technological progress of enterprises, and ultimately affect the strategic adjustment goal of economic structure.
These problems will naturally be solved after the implementation of the "consumption-type" value-added tax system, and because the "consumption-type" value-added tax can deduct the input tax of fixed assets and reduce the cash outflow, it will effectively stimulate the investment desire of enterprises and stimulate domestic demand, thus making greater contributions to achieving the goal of "maintaining growth".
Problems needing attention in implementing consumption-oriented value-added tax
Although "consumption-oriented" value-added tax is more scientific and perfect than "production-oriented" value-added tax, it is not perfect, and possible problems in the implementation process need to be handled carefully.
Possible fiscal revenue reduction in the near future. About 90% of China's fiscal revenue comes from taxes, and about 45% comes from value-added tax. After the implementation of "consumption-oriented" value-added tax, the input tax on the purchase of fixed assets can also be deducted, which will greatly narrow the tax base of value-added tax, thus leading to a significant reduction in the current value-added tax on the purchase of fixed assets.
It may further increase the pressure on labor and employment. Affected by the international financial turmoil, China's economy's ability to absorb labor force has greatly declined. After implementing the "consumption-oriented" value-added tax, the burden on enterprises to buy equipment is reduced. According to the general law of market economy, a large number of enterprises will change from labor-intensive with low profit rate to capital-intensive with high profit rate, which will further exclude labor force, increase employment pressure and bring certain hidden dangers to social stability.