Using　the　2012　input-output　table　of　China,　this　study　constructs　a　computable　general　equilibrium　model　by　embedding　the　value-added　tax　(VAT)　deduction　mechanism　into　the　price　model　and　analyses　the　effect　of　replacing　the　business　tax　with　the　VAT　reform　on　residents＇　income　distribution.　The　study　shows　that　the　VAT　reform　is　generally　conducive　to　residents＇　income　distribution.　Specifically,　the　VAT　reform　decreases　the　indirect　tax　burden　of　residents,　increases　their　real　income,　and　narrows　down　the　relative　income　gap　between　urban　and　rural　residents.　From　the　perspective　of　differences　between　the　before-　and　after-tax　Gini　coefficients　(the　MT　index),　both　the　pilot　VAT　reform　and　VAT　reform　improve　the　residents＇　income　distribution.　The　VAT　reform　also　improves　the　welfare　of　households.