Highway Project Value of Money Assessment under PPP Mode and Its Application

Table 2

The influence of replacing the business tax by a value-added tax pilot on highway projects.

Tax type	Items	Calculation
Collect business tax	Operating revenue	B
	Operating cost	C2
	Operating profit	B-C2
	The tax payable and attached	B3.3%
Collect value-added tax	Operating revenue does not include tax	B/(1+11%)
	Substituted money on VAT (See note 3)	B11%/(1+11%)
	No tax deductible operating costs	kC2/(1+17%)
	Input VAT ( input value added tax )	kC217%/(1+17%)
	The VAT payable= substituted money on VAT- input VAT	B11%/(1+11%)-kC217%/(1+17%)
Operation company’s; tax change	The VAT payable - The tax payable and attached	B11%/(1+11%)-kC217%/(1+17%)-B3.3%

Note 3: for the reason of highway construction costs in project investment estimation, here only the operating cost’s VAT deduction is considered.