application of the dynamic cge model in chinese indirect tax … · 2018. 6. 21. · in 1993 sna:...

Xuemei Shen

College of Economics Ritsumeikan University,Japan

Kazuo Inaba

College of Economics Ritsumeikan University,Japan

Application of the Dynamic CGE Model in Chinese Indirect Tax

Reform

9th Input Output Workshop

University of Bremen Germany March 15-16, 2018

Contents

2

1. Introduction: Background and goal

2. Growth Accounting for Chinese Economiy 2.1 Solow residual 2.2 Measurement of Chinese economy productivity

3.Construct SAM for China 3.1 How SAM is defined in System of National Accounts (SNA) 3.2 China’s System of National Accounts (CSNA)

4. SAM based CGE model 4.1 Entire economy

4.2 From Statistic model to dynamic model 4.3 Simulation case

5. Simulation Result 5.1 Influence on macroeconomics in the statistic model 5.2 Influence on macroeconomics in the dynamic model

6. Conclusion

BackgroundⅠ

3

Recent Indirect Tax system reform in chinai. 1994 Tax Sharing Reform:

GNP type Value Added Tax(VAT) :45% in total tax revenue (1994)

Business tax(BT-impose on service sectors):13% in total tax revenue (1994)

Enterprise Income Tax:14% in total tax revenue (1994)

Indirect tax vs. direct tax ⇒Imbalanced tax system

ii. GNP type VAT : from 2009 shifted to consumption type VAT

iii. BusinessTax(BT): from 2016 replace with VAT

1. Introduction:

Consumption type VAT

Tax on intermediate

input purchase

Tax on intermediate

＋Tax on investment

purchase

Tax on total

output

Business taxGNP type VAT

Tax on total

output

BackgroundⅡ

4

Recent Indirect Tax system reform in chinai. 1994 Tax Sharing Reform:

GNP type Value Added Tax(VAT) :31% in total tax revenue (2016)

Business tax(BT-impose on service sectors):9% in total tax revenue (2016)

Enterprise Income Tax:20% in total tax revenue (2016)

Indirect tax vs. direct tax ⇒Imbalanced tax system

ii. GNP type VAT : from 2009 shifted to consumption type VAT

iii. BT(business tax): from 2016 replace with VAT

1. Introduction:

BackgroundⅢ

5

Static CGE model

Result

→Relieve the tax burden

→ Domestic production increase

→ Household welfare improved

→Government tax revenue

decrease

Review Wangtao,Zhoujianjun(2000) “The Adoption

of CGE model in Chinese Economy ” ThePublic Finance Theory and Practition Vol.1

Institute of Quantitative & TechnicalEconomics ,Chinese Academy of SocialSciences PRCGEM (2002) “The CGEmodel Analysis of Chinese indirect tax reform”The Journal of Quantitative & TechnicalEconomics Vol.9

Mun-Heng TOH*, Qian LIN(2005)”Anevaluation of the 1994 tax reform inChinausing a general equilibrium model”Chaina Economic Review 16,North Holland

Shuanglin Lin. (2008). China's Value-addedTax Reform, Capital Accumulation, andwelfare implications, China EconomicReview Vol.19.

1. Introduction:

6

But the real economy is under dynamic movement

Not only tax reform → influence to the macro-economy

→economy growth also crowding out the tax reform

BackgroundⅣ1. Introduction:

2009

Goal of this paper

7

1. Growth Accounting

Solow residual

Measurement of Chinese economy productivity

2. Build SAM for China(2012)

China`s Input-Output table (2012)

China`s Social National Accounts (CSNA)

3. Construct Dynamic CGE model based on the SAM

VAT reform(2016) how to influence on―

Chinese macro economy

Indirect tax & direct tax revenue(economic growth how to

crowd out the tax reform)

In the statistic model vs. In the dynamic model

1. Introduction:

Solow Residual

8

The restriction of dynamic CGE model The model based on single period → data are obtained from an economy

Parameters are calibrated for this base year I-O table

growth → exogenous

Cobb-Douglas production function

Solow Residual(TFP)

２. Growth Accounting

𝑌𝑡 = 𝐴𝑡𝐾𝑡𝛼𝐿𝑡1−𝛼

log(𝑌𝑡) = log(𝐴𝑡) + 𝛼log 𝐾𝑡 + (1 − 𝛼)log(𝐿𝑡)

𝜕log(𝐴𝑡)

𝑡=𝜕log(𝑌𝑡)

𝑡− 𝛼

𝜕log(𝐾𝑡)

𝑡+ (1 − 𝛼)

𝜕log(𝐾𝑡)

𝑡• Physical capital:Kt

• Labor: Lt

• Value added: Yt

• TFP(a function of productivity):At

DATA Source for growth accounting

9

Real Data CIP(The China Industrial

Productivity ) database by RIETI(Research Institute of Economy, Trade and Industry , JP)

EU KLEMS Project 37sector

𝜕log(𝐴𝑡)

𝑡=

𝜕log(𝑌𝑡)

𝑡− 𝛼

𝜕log(𝐾𝑡)

𝑡+ (1 − 𝛼)

𝜕log(𝐾𝑡)

𝑡 Estimate:𝑌𝑡 = 𝐴𝑡𝐾𝑡

𝛼𝐿𝑡1−𝛼

𝐿𝑜𝑔 𝐴𝑡 =λ𝑡𝐿𝑜𝑔 𝑒 + 𝐿𝑜𝑔 𝐴𝑡

′

Estimate:𝑌𝑡 = 𝐴𝑡𝑒λ𝑡𝐾𝑡

𝛼𝐿𝑡1−𝛼


Regression

Solow Residual(TFP)

10

LKetAY lnlnlnlnln

Capital distribution

11


Capital vs. Labor growth rate vs.

Working Hour

12


Labor

Labor

Capital

TFP

Capital

Measurement of Chinese productivity

by nominal data

13


Labor

Capital

Capital

TFP

TFP


by nominal data

14


TFP

Labor

TFP

Capita


by real data

15


TFP

Capita

TFP

Capita


by real data

16

exp(lnA) expλexpλ２. Growth Accounting

17

0.6 ∗ 𝑥^0.3 ∗ 𝑦^0.7 0.8 ∗ 2.7^𝑡 ∗ 𝑥^0.3

LKAeY t LAKY 0.8 ∗ 2.7^ 𝑡 ∗ −0.6 ∗ 𝑥^0.3

0 0

China’s National Accounts System

18

National Income Accounts system in China

i. First stage (1952-1984): Soviet type Material Product System (MPS)

ii. Second stage (1985 to 1992):coexistence of MPS and SNA

iii. Third stage (1993 to present): adoption of SNA

The Guideline for Measuring GDP and National Income(1992)

keep the of MPS-based national income system in this era

China’s National Accounts (CSNA2002)

CSNA 2002 attempted to coincidence with the 1993SAN

3. Construct SAM for China

China’s System of National Accounts

(CSNA2002)

19

China’s System of National Accounts 2002 (CSNA2002) :

Based on the 1993 SNA

Non-profit institutions (NPI) :serving households sector

In 1993 SNA: classified to one of economic sector,

In CSNA2002: financed by government

Tariff

In1993SNA: the tariff is contained in the production tax

In Chinese Input-Output table: the production tax not include the

tariff, so separate the tariff from the imports

Japan-China Input-Output table(2007) by the Ministry of Economy

Trade and Industry of Japan to separate the tariff from the import.


Standard Macro SAM

20Source: refer 1993SNA(Schematic presentation of a SAM,1993SNA,pp.470) compiled by author

ⅰ.the supply and use of goods and servicesⅡ.production

Ⅲ.the distribution of income

Ⅳ.the use of income

Ⅴ.the capital transactions


100million

YuanAGRI MN FOOD MANFCTMACHNCOMMCUTILITYCONST FIR SERVS CAP LAB DEP HOH GOV INV IDT TRF EXT

AGRI 12321 25 31841 15207 150 2601 6 1888 514 697 20586 608 6693 1404

MN 6 7160 221 57519 525 4 10984 870 27 136 163 0 618 262

FOOD 9412 234 20021 5411 1053 7323 188 1131 1227 2248 37621 0 1804 3667

MANFCT 9176 7213 3845 215056 68712 1884 2405 77683 14960 15914 23380 0 6510 47317

MACHN 763 3353 362 15803 105892 1299 3791 12693 13310 4322 14888 0 77552 60181

COMMC 1398 954 4555 13158 10992 3875 708 5544 8291 5033 24243 0 5542 12350

UTILITY 893 3131 786 16828 3291 1083 16764 3226 1215 1270 4969 0 63 21

CONST 1093 1422 2891 12694 7087 3198 957 17375 6177 4640 6435 1973 131136 6994

FIR 1741 3452 2415 17284 13473 13982 3184 18172 37956 7642 37483 8791 18473 5500

SERVS 262 401 324 2234 1764 873 518 2256 3042 3934 28768 61810 1 1022

CAP 1 6899 5877 25648 15942 17161 2805 13719 35193 4134

LAB 52996 10438 6418 35101 23469 21179 4185 33492 29058 47796

DEP 2257 2744 2168 13996 6100 3861 4815 6666 22709 6366

HOH 127378 264134 71682 22279 907

GOV 25818 73606 2784

INV 239746 28119 -19476

IDT -2896 6172 6237 18426 7570 17166 2207 5862 11668 1194

TRF 10 42 337 1295 846 13 1 147 42 52

EXT 5108 24855 3044 28394 47342 1140 21 3348 4160 1830

Detailed SAM Table

21

4. SAM based CGE model and Scenarios

n

Structure of the entire economy

22

Q (composited goods)

M (import goods) D (domestic goods) E (export goods)

Z(domestic production)

Y(composited factor) ( input)

UU(utility function)

Cobb-Douglas

Cobb-Douglas

goods flow

Financial flow

Leontief

(

11


𝑌𝑗=𝑏𝑗 h𝐹ℎ,𝑗𝛽ℎ,𝑗

𝑏𝑗=𝐴𝑗𝑒λ𝑗 𝑡

GAMS /path

23

Labor

Capital

From Statistic model to dynamic model

　 ①tlabFpopF tlabtlab ,)1( ,1,

variable00…in the initial

variable0 …in BAU growth

variable1 …After some sock

④jjcapj rorFKK 00/0000 ,

⑤)exp)((,,,,

,,,,

, ectationmyopicSSSFp

FpIIp f

tt

p

t

p

t

i

ticap

f

ticap

tjcap

f

tjcap

tj

k

t

tjSSSFp

FpIIp f

ttgt

pt

i

ticapf

ticap

tjcapf

tjcap

tjkt ,)(

ˆˆ

ˆˆ

1,,1,,

1,,1,,

,

　 ②tjIIKKdepKK tjtjtj ,)1( ,,1,

③tjKKrorF tjjtcap ,,1,

%1pop

%600 ror


24

I. Ban Kaname(2007) " The Japan Multi-regional Forward

Looking Dynamic CGE model " Rieti Discussion paper

II. N.Hosoe, K.Gasawa, H.Hashimoto(2015),Textbook of

Computable Genera Equilibrium Modeling: Programming and

Simulations 2nd edition, University of Tokyo Press.

III. Morten I.Lau, Andreas Pahlke,Thomas F. Rutherford

(2002) " Approximating infinite-horizon models in a

complementarity format: A primer in dynamic general

equilibrium analysis" Journal of Economic Dynamics &

Control26,pp577-609

Ramsey model

From Statistic model to dynamic model


Tax Rate

25

before tax

reform

after tax

reform

before tax

reform

after tax

reform

before tax

reform

after tax

reform

AGRI 0.115 0.115 METALPRO 0.145 0.145 RETAIL 0.145 0.145

MN 0.145 0.145 GENMACHN 0.145 0.145 TRANS 0.040 0.099

PETRO 0.145 0.145 SPEMACHN 0.145 0.145 ACCOMM 0.050 0.057

METAL 0.145 0.145 TRNEQ 0.145 0.145 TECHSER 0.050 0.057

NONMETAL 0.145 0.145 ELEMAC 0.145 0.145 FINANCE 0.050 0.057

FOODTAB 0.115 0.115 ELEEQ 0.145 0.145 REALES 0.050 0.057

TEXT 0.145 0.145 MEASUR 0.145 0.145 RENT 0.050 0.057

WEARING 0.145 0.145 OTHMANU 0.145 0.145 SCISER 0.050 0.057

TIMBER 0.145 0.145 WASTE 0.145 0.145 WATMANA 0.050 0.057

PAPER 0.145 0.145 REPAIR 0.145 0.145 HOUSSER 0.050 0.057

REFINPETRO 0.145 0.145 SUPELEC 0.115 0.115 EDU 0.000 0.057

CHEM 0.145 0.145 GAS 0.115 0.115 HEALTH 0.050 0.057

NONMINEPRO 0.145 0.145 WATER 0.115 0.115 CULTURE 0.030 0.057

PROCMETAL 0.145 0.145 CONST 0.030 0.099 PUBSER 0.030 0.057

VAT sector 17% or 13% BT sector 3 ～ 20% → 6％ or 11%


0.13 0.11

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.115 0.099

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.115 0.115

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.17 0.17

0.13 0.11

0.13 0.11

0.13 0.11

0.030 0.099

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.145

0.145 0.099

0.115 0.099

0.115 0.099

0.115 0.099

0.030 0.099

0.17 0.17

0.040 0.11

0.050 0.06

0.050 0.06

0.050 0.06

0.050 0.06

0.050 0.06

0.050 0.06

0.050 0.06

0.050 0.06

0.000 0.06

0.050 0.06

0.030 0.06

0.030 0.06

0.145 0.145

0.040 0.099

0.050 0.057

0.050 0.057

0.050 0.057

0.050 0.057

0.050 0.057

0.050 0.057

0.050 0.057

0.050 0.057

0.000 0.057

0.050 0.057

0.030 0.057

0.030 0.057

26

Simulation CaseDescription

Case1

Imperfect Consumption type

VAT replace Business Tax(BT)

Replace BT sector with Imperfect Consumption type VAT.

So whole the sectors can deduct the tax on intermediate

inputs and investment for machinery.

Case2

Consumption type VAT

replace BT

Replace BT sector with perfect Consumption type VAT. So

whole the sectors not only can deduct the tax on

intermediate inputs and investments.

In the individual case the production tax rate (τ𝑗𝑧=T 𝑗

𝑧 / Z𝑗 ) representative as follow formulations.

τ𝑗𝑧: In the Benchmark(before the tax reform)

τ𝑗𝑧= (Imperfect Consumption-type VAT + Business Tax + Other IDT) /Z𝑗

τ𝑗𝑧: After BT reform In the Case 1:

τ𝑗𝑧= (Imperfect Consumption-type VAT + Other IDT) / Zj

In the Case 2: τ𝑗𝑧=(Consumption-type VAT + Other IDT) / Zj


27

Total tax revenue -14%

Total tax revenue -30%

2012

case1 case2

Effect on the macroeconomics in

the Static Model

5. Simulation result

28

The VAT system reform

influence on the production tax rate(𝜏𝑗𝑧)

effect on the tax revenue(𝑇𝑗𝑧, 𝑇𝑗

𝑚, 𝑇𝑗𝑑)



the Dynamic Model

Tz

(indirect tax)

Tm

(tariff)

Td

(direct tax)

growth rate 3.8% 3.8% 2.2%

𝜏𝑗𝑧

29

pq

ror

pq00=1

ror00=6%5. Simulation result

ror: ratio of return

to capital

pq: producgtion

price

30


Compare the BAU with case1

The growth of domestic production (Y) is higher in BAU

scenario than case1

Y_BAU

Y_Case1

Effect on the macroeconomics

31

5 Simulation result

Effect on the macroeconomics Compare the BAU with case2

The growth rate of domestic production (Y) is higher than

BAU scenario in the case2 but only in short period

Y_Case2

0

100000

200000

300000

400000

500000

600000

1 2 3 4 5 6 7 8 9 10

SERVS

FIR

CONST

COMMC

UTILITY

MACHN

MANFCT

FOOD

MN

AGRI

Y_BAU

5. Conclusion

32

Conclusion

Indirect tax reform can increase domestic production only in shortperiod not keeping on.

→ Indirect tax reform couldn’t recover economy essentially

After the indirect tax reform the government tax revenue not be decrease

→ government damage can be alleviate by the

economic growth

Further Studies

Separate the corporate from the household

Analyze more the distortion of the economic growth and the tax reform

References

33

Dervis, K., de Melo, J., and Robinson, S. (1982). General Equilibrium Models for Development Policy,Cambridge University Press(Reprinted by the World bank,1989)

Commission of the European Communities(EC), International Monetary Fund(IMF),Organisation for Economic Co-operation and Development(OECD), United Nations(UN),World Bank(WB)(1993), System of National Accounts1993.

China Statistical Yearbook .Beijing: Statistical Publishing House.

Hans Lofgren, Rebecca Lee Harris, Sherman Robinson. (2002).A standard Computable General Eliblium (CGE) Model in GAMS. International Food policy Research Institute. Microcomputers in Policy Research5.

John B. Shoven, John Whalley. (1984). Applied Genera-Equilibrium Models of Taxation and International Trade: An Introduction and Survey. Journal of Economic Literature Vol. 22(3). pp.1007-1051

King,B.(1985),What is a SAM, in Pyatt and Round(1985),pp.17-51

N.Hosoe, K.Gasawa, H.Hashimoto(2015),Textbook of Computable Genera Equilibrium Modeling: Programming and Simulations 2nd edition, University of Tokyo Press.

Shoven, J.B., and Whalley J. (1972). A General Equilibrium Calculations of the Effects of Differential Taxation from Income from Capital in the US. Journal of Public Economics, Elsevier,vol.1(3-4), pp.281-321.

Shoven, J.B. (1973).General Equilibrium with Taxes: A Computational Procedure and an Existence Proof. Rev. Econ. Stud. pp. 475-490.

Shuanglin Lin. (2008). China's Value-added Tax Reform, Capital Accumulation, and welfare implications, China Economic Review Vol.19. pp.197-214.

Pyatt, Graham; Round, Jeffery I. (1985). Social Accounting Matrices: A Basis for planning. Washington, DC : The World Bank. ( http://documents.worldbank.org/curated/en/1985/09/439689/ social-accounting-matrices-basis-planning)

Pyatt, Graham(1999), Some Relationships between T-Accounts,Input-Output Tables and Social Accounting Matrices, Economic System Research, Vol.11,No.4,pp365-387

Tao Wang, Jianjun Zhou (2001). Comparative research on the turnover and income tax systems, Modern Economic science.Vol.23.No.2. pp.52-59

Xuemei Shen. (2012). An Evaluation of China's Taxation Centered on Indirect Tax：Estimations Using the Input-Output Table, ArthaVijnana, Vol. LIV. pp252-279.

Xu, X. C. (2008), Some differences in GDP measurements between China's practice and 1993 SNA guideline China Economic Review 19,pp.480–488

Xu, X. C. (2009),The Establishment, Reform, and Development ofChinese System ofNational Accounts. Review ofIncome and Wealth 55(1),pp.442-465.

34

https://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjLqovYyNnVAhXHnJQKHdc6ArwQjRwIBw&url=https://pixta.jp/tags/%E6%AD%A3%E5%BA%A7 %E7%9D%80%E7%89%A9?search_type=2&page=3&psig=AFQjCNH7MONIWpG8g7dnxi2hOSzZTulQUw&ust=1502897616556702

https://www.google.co.jp/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjLqovYyNnVAhXHnJQKHdc6ArwQjRwIBw&url=https://pixta.jp/tags/%E6%AD%A3%E5%BA%A7 %E7%9D%80%E7%89%A9?search_type=2&page=3&psig=AFQjCNH7MONIWpG8g7dnxi2hOSzZTulQUw&ust=1502897616556702

35

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

1992 1997 2002 2007 2012

K1

0

400,000,000

800,000,000

1,200,000,000

1,600,000,000

1992 1997 2002 2007 2012

K10

0

500,000,000

1,000,000,000

1,500,000,000

1992 1997 2002 2007 2012

K11

0

2,000,000,000

4,000,000,000

6,000,000,000

1992 1997 2002 2007 2012

K12

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

1992 1997 2002 2007 2012

K13

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

1992 1997 2002 2007 2012

K14

0

400,000,000

800,000,000

1,200,000,000

1,600,000,000

1992 1997 2002 2007 2012

K15

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

1992 1997 2002 2007 2012

K16

0

1,000,000,000

2,000,000,000

3,000,000,000

1992 1997 2002 2007 2012

K17

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

1992 1997 2002 2007 2012

K18

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

1992 1997 2002 2007 2012

K19

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

1992 1997 2002 2007 2012

K2

0

100,000,000

200,000,000

300,000,000

1992 1997 2002 2007 2012

K20

0

400,000,000

800,000,000

1,200,000,000

1,600,000,000

1992 1997 2002 2007 2012

K21

0

1,000,000,000

2,000,000,000

3,000,000,000

1992 1997 2002 2007 2012

K22

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

1992 1997 2002 2007 2012

K23

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

1992 1997 2002 2007 2012

K24

0.0E+00

4.0E+09

8.0E+09

1.2E+10

1992 1997 2002 2007 2012

K25

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

1992 1997 2002 2007 2012

K26

0.0E+00

5.0E+09

1.0E+10

1.5E+10

2.0E+10

2.5E+10

1992 1997 2002 2007 2012

K27

0

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

1992 1997 2002 2007 2012

K28

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

1992 1997 2002 2007 2012

K29

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

1992 1997 2002 2007 2012

K3

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

1992 1997 2002 2007 2012

K30

0

400,000,000

800,000,000

1,200,000,000

1992 1997 2002 2007 2012

K4

0

200,000,000

400,000,000

600,000,000

1992 1997 2002 2007 2012

K5

0

1,000,000,000

2,000,000,000

3,000,000,000

4,000,000,000

5,000,000,000

1992 1997 2002 2007 2012

K6

0

500,000,000

1,000,000,000

1,500,000,000

1992 1997 2002 2007 2012

K7

0

400,000,000

800,000,000

1,200,000,000

1,600,000,000

1992 1997 2002 2007 2012

K8

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1992 1997 2002 2007 2012

K9

K_nominal

36

K_real

37

0

200,000,000

400,000,000

600,000,000

1992 1997 2002 2007 2012

L1

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1992 1997 2002 2007 2012

L10

0

20,000,000

40,000,000

60,000,000

1992 1997 2002 2007 2012

L11

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

L12

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

1992 1997 2002 2007 2012

L13

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

L14

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1992 1997 2002 2007 2012

L15

0

20,000,000

40,000,000

60,000,000

1992 1997 2002 2007 2012

L16

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

1992 1997 2002 2007 2012

L17

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1992 1997 2002 2007 2012

L18

0

10,000,000

20,000,000

30,000,000

40,000,000

1992 1997 2002 2007 2012

L19

0

10,000,000

20,000,000

30,000,000

40,000,000

1992 1997 2002 2007 2012

L2

0

2,000,000

4,000,000

6,000,000

8,000,000

1992 1997 2002 2007 2012

L20

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1992 1997 2002 2007 2012

L21

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

L22

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

1992 1997 2002 2007 2012

L23

0

20,000,000

40,000,000

60,000,000

1992 1997 2002 2007 2012

L24

0

50,000,000

100,000,000

150,000,000

200,000,000

1992 1997 2002 2007 2012

L25

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

1992 1997 2002 2007 2012

L26

0

100,000,000

200,000,000

300,000,000

400,000,000

1992 1997 2002 2007 2012

L27

0

40,000,000

80,000,000

120,000,000

1992 1997 2002 2007 2012

L28

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

24,000,000

1992 1997 2002 2007 2012

L29

0

10,000,000

20,000,000

30,000,000

40,000,000

1992 1997 2002 2007 2012

L3

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

L30

0

5,000,000

10,000,000

15,000,000

1992 1997 2002 2007 2012

L4

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1992 1997 2002 2007 2012

L5

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

1992 1997 2002 2007 2012

L6

0

10,000,000

20,000,000

30,000,000

1992 1997 2002 2007 2012

L7

0

10,000,000

20,000,000

30,000,000

1992 1997 2002 2007 2012

L8

0

4,000,000

8,000,000

12,000,000

16,000,000

1992 1997 2002 2007 2012

L9

L_nominal

38

L_real

39

0

200,000,000

400,000,000

600,000,000

1992 1997 2002 2007 2012

V1

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V10

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V11

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

1992 1997 2002 2007 2012

V12

0

40,000,000

80,000,000

120,000,000

1992 1997 2002 2007 2012

V13

0

50,000,000

100,000,000

150,000,000

200,000,000

1992 1997 2002 2007 2012

V14

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V15

0

40,000,000

80,000,000

120,000,000

160,000,000

1992 1997 2002 2007 2012

V16

0

40,000,000

80,000,000

120,000,000

160,000,000

1992 1997 2002 2007 2012

V17

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

1992 1997 2002 2007 2012

V18

0

40,000,000

80,000,000

120,000,000

1992 1997 2002 2007 2012

V19

0

40,000,000

80,000,000

120,000,000

1992 1997 2002 2007 2012

V2

0

4,000,000

8,000,000

12,000,000

16,000,000

1992 1997 2002 2007 2012

V20

0

20,000,000

40,000,000

60,000,000

1992 1997 2002 2007 2012

V21

0

40,000,000

80,000,000

120,000,000

160,000,000

1992 1997 2002 2007 2012

V22

0

100,000,000

200,000,000

300,000,000

400,000,000

1992 1997 2002 2007 2012

V23

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

1992 1997 2002 2007 2012

V24

0

200,000,000

400,000,000

600,000,000

1992 1997 2002 2007 2012

V25

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

1992 1997 2002 2007 2012

V26

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1992 1997 2002 2007 2012

V27

0

100,000,000

200,000,000

300,000,000

400,000,000

1992 1997 2002 2007 2012

V28

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

1992 1997 2002 2007 2012

V29

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V3

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

1992 1997 2002 2007 2012

V30

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

1992 1997 2002 2007 2012

V4

0

10,000,000

20,000,000

30,000,000

1992 1997 2002 2007 2012

V5

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

1992 1997 2002 2007 2012

V6

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V7

0

20,000,000

40,000,000

60,000,000

80,000,000

1992 1997 2002 2007 2012

V8

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

1992 1997 2002 2007 2012

V9

V_nominal

40

V_real

Production tax structure

41


VAT

=Tax on value added part

GNP-type VAT

=𝑍𝑗𝑣𝑝𝑗𝑞

+ 𝑝𝑖𝑤𝑚𝑀𝑖 − 𝑝𝑖

𝑤𝑒𝐸𝑖)×𝑇𝑅𝑗𝑣－𝑝𝑖

𝑞𝑋𝑖𝑗𝑣×𝑇𝑅𝑗

𝑣

Business Tax

=𝑍𝑗𝑏𝑝𝑗𝑞×𝑇𝑅𝑗

𝑏

Imperfect Consumption-type VAT (from 2009)

=(𝑍𝑗𝑣𝑝𝑗𝑞



𝑞(𝑋𝑖𝑗 + 𝐼𝑛𝑣𝑚𝑎𝑐ℎ𝑖𝑛𝑒,𝑗)×𝑇𝑅𝑗

𝑣

Consumption-type VAT

=(𝑍𝑗𝑣𝑝𝑗𝑞



𝑞(𝑋𝑖𝑗 + 𝐼𝑛𝑣𝑖𝑗)×𝑇𝑅𝑗

𝑣

42

The VAT system reform

influence on the production tax rate(𝜏𝑗𝑧)

effect on the tax revenue(𝑇𝑗𝑧, 𝑇𝑗

𝑚, 𝑇𝑗𝑑)



the Dynamic Model

(Billion Yuan)Tz

(indirect tax)

Tm

(tariff)

Td

(direct tax)

In the benchmark 50633.0 2255.1 189360

After tax reform 52779.3 2339.8 193580

growth rate 3.8% 3.8% 2.2%

𝜏𝑗𝑧


43

Source:China’s Growth and Productivity

performance Debate Revisited – Accounting for

China’s Sources of Growth with a New Data Set,

Harry X. Wu. Institute of Economic Research,

Hitotsubashi University, Tokyo. January 2014.

Capita

TFP

Capita

TFP

Source: Estimated by auther by the CIP database.


application of the dynamic cge model in chinese indirect tax … · 2018. 6. 21. · in 1993 sna:...

Documents