The Top-level Institutional Design on the Perfection & Expansion of VAT Reform Pilot

Abstract

The VAT Pilot Reform has deepened the tax reform and adjustment, and also brought significant reform to the tax law system, tax institution and the whole economic, societal, and political institutions. In fact, a lot of unpredicted problems arose during the process of VAT Reform. For example, the doubt of legitimacy and constitutionality in this reform, the implementation of structural tax cuts in enterprises, the revenue allocation between central and local government, the principle of tax fairness and the reliance interests relationship between both sides as prime examples. Consequently, we must understand that only by improving tax legislation and specific institution design on structural tax cuts and enhancing the supporting measures of VAT Reform under the guidance of Constitution and Law can we really achieve the VAT Reform purposes. Key words: VAT pilot reform; Structural tax cuts; Top-level institutional design