Study on Imposing Excise Tax and Reforming the Tax-sharing System

At present,there exist some problems in China's tax-sharing system,such as local tax system incompletion,low efficiency of transfer payment allocation,reinforcing extensive economic growth model,etc. The author believes that the core of the tax-sharing system reform is to perfect the local tax system. Therefore,the local tax should be levied in consumption link instead of production link,and the tax-sharing system reform which focuses on imposing excise tax is essential. The main points of the reform are as follows. First,make the valueadded tax which is levied in production link as central tax. Second,make the excise tax which is levied in consumption link as local tax. Third,reduce the value-added tax rate substantially. Fourth,make individual income tax as local tax and make business income tax as central tax. Fifth,cancel the business tax. Considering the complexity of the tax system reform,this paper proposes the alternative solution which changes the VAT share proportion between central and local government.