The Relationship Between VAT Base Expansion and Intergovernmental Fiscal Relations from the Perspective of the Dual Processes of Industrialisation and Urbanisation

In this paper, the relationship between VAT base-expansion and intergovernmental financial relations is discussed from the perspective of the dual processes of industrialisation and urbanisation.First, this article theoretically analyses the VAT base-expansion and its real world implications and then evaluates the intergovernmental fiscal relationship.Lastly, an empirical simulation of the effect of base-expansion on local fiscal revenue and expenditure in this dual process is performed. Based on this conclusions are drawn and relevant policy suggestions are put forward