Research on the adjustment of railway project cost standards in line with the policy of replacing business tax with value-added tax

Research purposes: This research is an attempt at finding ways of adjusting the standards for budget estimate and budget of railway capital construction for better compliance with the new national policy of replacing business tax with value-added tax, covering the whole spectrum from cost composition, cost calculation, cost standards, and project quota. Research conclusions: (1) Project cost for railway construction and installation=pre-tax project cost for railway construction and installation ×(1+11%). Pre-tax project cost for railway construction and installation comprises labor cost, material cost, cost for using machinery, transportation cost, price difference, fill cost, construction measure cost, extra cost for special construction, and indirect cost, all of which are calculated by deducting the input value-added tax which could be replaced by value-added tax. (2) The increase of material information cost does not include the input value-added tax which could be replaced by value-added tax. The budget estimate of materials such as local materials shall be calculated according to the investigated cost from which the value-added tax is excluded. (3) The extra taxes such as urban maintenance and construction tax, extra education tax, extra local education tax are closely related to the level of enterprise management, and thus in calculating project cost shall be incorporated into the enterprise management cost. (4) The original cost of equipment shall be incorporated into the budget estimate by deducting the input value-added tax which could be replaced by value-added tax; the cost rate of equipment transportation shall be adjusted based on the original cost of equipment; the tax shall be calculated according to: (the original cost of equipment + the cost of equipment transportation) ×11%. (5) The research results are applicable to the field of railway project cost, and can serve as a reference for revising the current standards for railway project cost. © 2016, Editorial Department of Journal of Railway Engineering Society. All right reserved.