The effect of a fiscal squeeze on tax enforcement: Evidence from a natural experiment in China

• 成果类型: Article
• 署名作者: Chen, Shawn Xiaoguang
• 署名单位: University of Western Australia
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2017.01.001
• 发表日期: 2017
• 页码: 62-76
• 关键词: Tax enforcement; Local governments; Tax capacity

摘要

This paper investigates the impact of the abolition of the agricultural taxes in 2005 across China on county governments' incentives for tax enforcement. I show that the revenue loss of county governments was largely offset by tougher tax enforcement. The incentive for VAT enforcement can be weakened, however, if the county: (1) receives a lower share of total VAT revenues; (2) has a broader VAT tax base; or, (3) has more abundant sources of revenue from land sales. These findings suggest that incentives of local governments can be vital to tax enforcement and to the tax capacity of a country. (C) 2017 Elsevier B.V. All rights reserved.