Two tax merger completed as soon as possible

 It is reported that the recent merger inside and outside the corporate income tax is about to enter the legislative process. According to China's reform experience of officials in charge of reform can be clearly shown in the timetable, not only that this reform is, in contrast, also shows that the interests of all the struggles to reach the critical moment .
modern state based on the experience of a government of any reform measure, in essence, can be attributed to the theory, system, technology three levels of motivation. Among them, the theoretical support for the legitimacy of the reform, institutional impact Reform of the time and procedures, technology determines the actual operation of the reform. Tax policy is no exception.
If you put the two tax merger framework of the above analysis, then we will come to this reform should be completed as soon as possible conclusions. First of all, from a theoretical point of view, two factors determine the two tax merger of the urgency of reform, that optimize the financial structure and improve the microeconomic foundation of economic growth. On the one hand, reform and lack of funds for domestic development and opening up, it requires a lot of foreign investment and their management experience. However, the current domestic economic growth, funds have been used for more adequate, but because of defects in the mechanism of funds, domestic funds have not been fully effective use of the high bank deposits and non-formal financial difference is the generalization specific performance. Government supports the introduction of foreign capital is nothing more than the pursuit of economic growth and improve the utilization of domestic resources can completely replace the effectiveness of foreign investment growth, while reducing costs and promoting financial deepening.
But in fact, serious problems in the current financial structure is the lack of funding long-term credit and can not effectively support the process of urbanization and industrialization, and lead deposits of banks Duan long credit risk. However, the role of foreign investment in this area is limited, total fixed asset investment in the proportion of foreign investment, has grown from 1996 The maximum decrease of 11.8% to 5.3% in 2004, also showed short-term characteristics of foreign investment, which also contains a large number in order to obtain preferential treatment for the purpose of false foreign investment, foreign investment in recent years, a number of sources before a similar increase in the Cayman Islands region, mostly transformed from the domestic funds.
the other hand, most of the experience of economic development of countries, preferential policies for foreign investment are not long-term policy. For large economies, the fundamental driving force growth Or should be based on the domestic market. foreign advanced technology and experience to bring the trend has been weakening, future policy should focus on equal treatment under the enhanced viability of domestic enterprises, so that economic growth really get a solid foundation within the micro, from the global field generation mechanism due to lack of optimal policy, a small number of relevant departments of the reform are often damaged as the decisive force in policy outcomes. two tax merger reform, the behavior of some of the relevant departments associated with the body just confirms the interest of the distortion of the public interest. Therefore, by the merger of the two tax reform to the individual an effective test of the government decision-making capacity, and touched the government's public choice in decision-making mechanism of the seeds, but also a blessing.
In addition, foreign investment in certain areas is also an important factor in the performance evaluation First, the reform will therefore affect the interests of some local governments. In this regard, to achieve national treatment of foreign capital, not only to eliminate the original policy objective to strengthen the regional development differences, but also to the fundamental conceptual shift from concessions to attract investment by , the number of the neglect of attention to the quality of the phenomenon responsible for the prevention of excessive foreign debt, while invisible, so that local governments attach importance to improvement of investment environment, but also emphasis on the use of domestic funds.
from a technical perspective, there are several points worthy of attention. First, fiscal reform, the issue of costs under the two tax merger the merger of the natural need to determine the interval, which relates to fiscal capacity. from the current point of view, fully able to withstand the financial scale appropriate to reduce switching costs and revenue. And with the reforms financial management system can further organize, streamline financial and government departments at all levels of relationship and lay the foundation for value-added tax and other tax reforms. The second is to merge the content is not simple, the implementation of corporate income tax, preferential direction of indirect benefits and industry into concessions, the determination of the transition program and other details, all affect the efficiency of the implementation of this reform, and the final results. Third, China needs the multinationals and strategic investors will not give up the tax policy a huge potential market, but the policy delay no uncertainty, it would be useful for foreign expansion and a negative impact on intervention.
In short, the two tax merger is the trend, in line with the self-Adam. Smith has been the basic principles of modern finance. Now is the the best time to reforms.