Research on the Forecast and Development of China’s Taxation based on ARMA Model

Zhou Jinlin

COMPUTER MODELLING & NEW TECHNOLOGIES 2014 18(12C) 904-907

Department of Economy and Management, Henan Polytechnic Institute, Nanyang city, Henan Province, China. 473000

China’s tax revenue has increased quickly in recent years, significantly higher than China’s economic growth. This not only goes against performance of government functions and economic development, but also increases burden to enterprises and individuals. This paper carried out a deep analysis on the tax changes of China from 1995 to 2013 based on the collected data of China Statistical Yearbook for Regional Economic. Moreover, short-term tax changes in future forecasted by ARMA model and reasons of its quick growth were analyzed. The analysis discovered that China’s taxation still will maintain quick growth in the short run. This indicates that China’s tax growth will be accelerated, which will further increase burdens to enterprises and individuals. To slow down the tax growth and guarantee performance of government functions, it is suggested to: 1) strengthen tax supervision and strictly prohibit increasing tax items and rate blindly; 2) improve tax structure, reduce tax items and prevent double taxation; 3) implement transformation from production-type VAT to consumption-type VAT; 4) promote reform of taxation expenses and correct taxation disorder.