Abstract: Private enterprises are an important force in promoting economic and social development, however, the changes of the tax policies is an important factor affecting the development. Under the impact of such adverse factors as the global economic downturn, the poor supply chain and industrial chain, and so on, the insufficient investment and low investment efficiency of the private enterprises have become obstacles preventing the stimulation of their vitality. By making use of the quarterly data of private listed companies from 2017 to 2019, this paper empirically analyzes the impact of VAT rate reduction on the investment scale and investment efficiency of private enterprises, as well as the impact mechanism of VAT rate reduction on investment efficiency of private enterprises. The results show that the incentive effect of VAT rate reduction can not only significantly promote the expansion of investment scale of private enterprises, but also significantly improve the current situation of insufficient investment, so as to improve the investment efficiency. Further research shows that the reduction of VAT rate can indirectly improve the investment efficiency of private enterprises when promoting the expansion of investment scale. Therefore, it is necessary to perfect the fiscal and tax supporting policy system, to form the fiscal and tax policy joint force to support the healthy development of private enterprises, to optimize the combined tax support policy, to let the tax policyplay the supporting role for private enterprises, to strengthen the coordination between more prudent monetary policy and active fiscal policy, and to effectively solve the problem of financing constraints faced by private enterprises.

Key words: VAT, tax rate reduction, private enterprise, investment scale, investment efficiency