Value-added tax is a tax levied on the value-added of units and individuals who sell goods or provide processing, repair and replacement services and import goods. Value-added tax has become one of the most important taxes in China, accounting for more than 60% of all taxes in China, and it is the largest tax. In practice, it is difficult to accurately calculate the added value or additional value of commodities in the process of production and circulation. Therefore, China also adopts the method of tax deduction, which is a widely used method in the world. That is, according to the sales of goods or services, the sales tax is calculated at the prescribed tax rate, and then the value-added tax paid when obtaining goods or services is deducted, that is, the input tax, and the difference is the taxable amount of the value-added part. This calculation method embodies the principle of taxation according to value-added factors.
The collection of value-added tax usually includes all links in the production, circulation or consumption process. It is a neutral tax based on value-added or price difference. Theoretically, it includes all agricultural industries (planting, forestry and animal husbandry), mining, manufacturing, construction, transportation and commercial services. Or all links of raw material procurement, manufacturing, wholesale, retail and consumption. The change from business tax to value-added tax mainly involves transportation and some modern service industries. Transportation includes land transportation, water transportation, air transportation and pipeline transportation. Modern service industries include: R&D and technical services, information technology services, cultural and creative services, logistics auxiliary services, tangible movable property leasing services, and judicial expertise consulting services. The overall tax burden of the reform pilot industries will not increase or decrease. For industries that currently collect VAT, whether in Shanghai or other regions, the input tax for purchasing taxable services from pilot taxpayers can be deducted, and the tax burden will be reduced accordingly. Among the1.2000 pilot enterprises, for 35000 general taxpayers, due to the introduction of VAT deduction, compared with the full collection of the original business tax, the tax burden will be reduced or even greatly reduced; For 85,000 small-scale taxpayers, after the business tax is changed to value-added tax, the collection rate is 3%, which is 2 percentage points lower than the original business tax rate. There is indeed an increase in the tax burden of individual enterprises in the reform.