Analyze the impact of the transition from business tax to VAT on the tax burden of transport enterprises in various regions of China

Jun Ma, Yulia V. Leontyeva, Alexey Y. Domnikov


In recent years, the transportation industry has enjoyed the benefits brought about by changes in the national tax policy. The purpose of this paper is to analyze the impact of the change from Business Tax to Value-Added Tax (BT-to-VAT) on the tax burden of transport enterprises in various regions of China. Based on the cross-regional characteristics of the transportation industry, China is divided into four regions: eastern, central, western and northeast. Research hypothesis – the tax reduction effect of the BT-to-VAT tax burden is not only related to the characteristics of the enterprise itself, but also related to the regional environment and market integration factors of China. Using the Difference in differences (DID) method, the data covers 22 listed companies from 2009 to 2020. The paper analyzes the internal characteristics of the enterprise itself, the influence of the external environment and the degree of industrial integration on the enterprise, and the reasons for the difference. Empirical research shows that BT-to-VAT reduces the tax burden of enterprises, the eastern region has the least impact on the ratio of corporate income tax expenses to operating income, while the central and western regions have relatively greater impacts. The scale of the enterprise and the level of economic development have a positive effect on the financial efficiency of the enterprise, while the non-current assets ratio and the degree of market integration have a negative effect on the tax burden. This research is beneficial to provide reference for enterprises in different regions to improve their management and to formulate macro policies by relevant national departments.

For citation

Ma J., Leontyeva Yu.V., Domnikov A.Y. Analyze the impact of the transition from business tax to VAT on the tax burden of transport enterprises in various regions of China. Journal of Tax Reform. 2022;8(2):199–211.

Article info

Received March 12, 2022; Revised May 24, 2022; Accepted June 6, 2022


transport industry, Business Tax, VAT, tax burden, difference in differences method


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