Analysis On the Effect and Transition of Value Added Tax(VAT)

From the practices of countries all over the world,VAT has three types:consumption type,revenue type and production type.Different type of VAT has different effects on revenue,economic structure,investment scale,price as well as imports and exports.China adopts production type VAT,which causes repeated taxation,inappropriate decision of enterprices and violation of the target of industrial policy.From the view of optimizing the tax system,it is necessary to transfer present production type VAT to consumption type VAT.The article analyses the risks and opportunities of the transition and offers specific outline.