Abstract: The conversion from the business tax to a value added tax (hereafter conversion reform) is an important fiscal reform that aims at promoting the development of the service industry and improving the economic structure. Based on the survey results from Huzhou Municipality of Zhejiang Province, we conducted an empirical study on the impact of the conversion reform on the tax burden of micro, small and medium enterprises. The study shows that the conversion reform can reduce the tax burden on small and micro enterprises as well as enterprises in the pilot program, but the tax burden on the transportation sector has risen. Also, we find that overall tax burden on small and micro enterprises is higher than that on medium-sized enterprises. We offer a few recommendations to address these issues.
Full report ： Impact of Business Tax-to-VAT Conversion on Firms -- An survey-based analysis.pdf
