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As the severity of global climate change escalates, carbon peak and carbon neutrality have emerged as international imperatives. Green taxation, a crucial fiscal strategy promoting the transition to a green low-carbon economy, demands thorough investigation regarding its efficacy and operational mechanisms. Predominantly, existing research has concentrated on the macroeconomic implications of green taxes, while their influence on regional green growth and innovation remains underexplored. This paper delineates green taxation in both a broad and narrow sense, elucidating its essence and potential in stimulating regional green progress and innovation. Utilizing panel data from 30 provinces in China spanning 2004 to 2021, a bidirectional fixed-effects model was developed for empirical analysis. Moreover, an impact mechanism model was constructed to delve into how green taxation specifically affects regional green development and innovation. Findings reveal that green taxation significantly fosters regional green growth and markedly enhances green innovation. Nonetheless, due to the resource crowding-out effect, it adversely impacts the comprehensive innovation capabilities of regional enterprises. This insight offers a fresh perspective on the paradoxical effects of green taxation, underscoring the necessity for a balanced approach in policy design and implementation. Drawing on these conclusions, the paper presents tailored policy recommendations. [ABSTRACT FROM AUTHOR]

This study develops an R &D-based growth model with corporate taxation to explore the heterogeneous effects of intellectual property rights (IPR) protection on innovation of firms with different tax rates. Our theoretical analysis shows that strengthening IPR stimulates innovation, and a higher tax rate dampens the positive effect of IPR. To account for the interactive effect between IPR and taxation, we find supportive evidence for the theoretical result using firm-level data in China. Moreover, our empirical analysis shows that strengthening IPR is associated with less innovation by high-tax firms and more innovation by low-tax firms. [ABSTRACT FROM AUTHOR]

Over the past decade, there is a growing global call for low carbon development. However, there is no adequate low‐carbon policies to address the trade‐off between rural logistics development and low‐carbon goals. Jiangsu is one of the pilot sites for most of China's policy reforms and has the potential to develop a low carbon transformation of rural logistics. Therefore, we provide an in‐depth analysis of the above trade‐offs from an industrial perspective by integrating the key features of rural logistics into a unified framework and modelling a rural logistics system dynamic model using rural logistics in Jiangsu as a case study. We compare the development trend of Jiangsu's rural logistics industry from 2021 to 2030 under the traditional development model, the green image policy, the fixed carbon policy and the fixed carbon tax rebate policy. The findings show that, first, in the absence of policy intervention, rural logistics in Jiangsu will not actively adopt any low‐carbon behaviour, which will lead to an inevitable rise in CO2. Second, the simulation results in fixed carbon policy show that the policies that impose excessive burdens on rural logistics are invalid rural logistics that need enough funds to develop their own supply capacity and carbon abatement capacity. Third, the green image policy is more advantageous in addressing the trade‐offs between rural logistics development and the low‐carbon transition, which not only avoids burdening rural logistics but also improves the supply capacity of rural logistics by increasing the demand for rural logistics. Finally, the government can implement the green image policy in the early stage and then introduce the carbon tax rebate policy in the middle stage to improve and increase the capacity of the rural logistics sector to embrace low carbon transition, which can help implement subsequently implement the carbon tax rebate policy. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of Phase 2 of the Golden Tax Project on the value-added tax (VAT) in China. The reform introduced computer-generated invoices and electronic transaction linking. Using a difference-in-differences strategy, we show that the reform increased VAT by reducing exaggerated VAT deductions. The introduction of the new digital technology had large positive effects on Chinese fiscal capacity. VAT gains from the reform explain approximately 13.7% of VAT growth during 1998–2007. [ABSTRACT FROM AUTHOR]

This article empirically examines the impact of tax structure on corporate tax compliance using Chinese industrial enterprise database and prefectural data. The results show that relying more on indirect taxes tends to decrease corporate tax compliance, while increasing the ratio of direct taxes of total tax revenues significantly enhances corporate tax compliance. To overcome endogeneity, the robustness is tested using instrumental variables and other robustness checks, such as changing variables and changing time windows. Mechanism analysis shows that it is conducive to reducing the complexity of the tax system, improving the quality of governance, and enhancing taxation efforts. This article examines the impact of tax system on corporate taxation behaviour from the perspective of the tax structure, which also provides microscopic empirical evidence for tax reform in China. [ABSTRACT FROM AUTHOR]

Based on the special background of transition economies, in which governments play a particularly important role in firms' survival and development, we discuss the impact of performance shortfall on firms' tax avoidance, which is a behavior that is considered unethical and irresponsible by the public. Drawing upon performance feedback theory and institutional theory, we propose that performance shortfall will drive firms to reduce tax avoidance to enhance their political legitimacy, thereby gaining more government support to solve current performance problems. We also argue that the relationship between performance shortfall and firms' tax avoidance is likely nuanced and may vary by institutional logics (e.g., state-owned enterprises (SOEs)), and regional marketization degree). Specifically, we argue that SOEs will strengthen the above-mentioned relationship, and the regional marketization degree will weaken the above-mentioned relationship. After testing listed companies in China as the research object, we find that most of our theoretical views are supported by empirical evidence. [ABSTRACT FROM AUTHOR]

This article investigates whether and how chairmen with China's Great Famine experience affect firm tax avoidance activities. We find that the chairmen who experienced China's Great Famine in early‐life engage in fewer tax avoidance activities than other chairmen. This effect is stronger for firms in regions with a weak gambling culture and provinces with higher political uncertainty, nonstate‐owned firms, and chairmen with higher education. We show that a lower‐level risk appetite among chairmen is the primary mechanism driving lower tax avoidance in their firms. Our article provides new insights into the differences in tax avoidance between firms based on whether managers experienced the Great Famine. [ABSTRACT FROM AUTHOR]

Promoting green low-carbon development is an important task in the construction of ecological civilization of China. The leadership has proclaimed green low-carbon development as the top national priority for development. Green low-carbon economy has become the high point of global industrial competition. Green taxation, as a tool for environmental regulation, plays an important role in the construction of ecological civilization. Therefore, this paper investigates the impact of green taxation on green low-carbon development in the Yangtze River Delta (YRD) region of China, using data of 41 cities from 2011 to 2021 in the YRD region. We construct a green low-carbon development index with the combined weight CRITIC-entropy method, and employ a mediating effect model and a spatial Durbin model based on double fixed effects in this study, which intends to provide a theoretical basis for the establishment of a sound tax policy system that is conducive to the green low-carbon development. The results show that (1) there is an evident spatial dependence of green low-carbon development in the YRD region; (2) green taxation has a significant positive effect on green low-carbon development through rationalization of industrial structure and advance of industrial structure; and (3) the positive impact of green taxation on green low-carbon development in the region is characterized by spatial spillover and heterogeneity. Specifically, green taxation significantly promotes green low-carbon development in the core area, but such green taxation dividend has yet to be realized in the expansion area. [ABSTRACT FROM AUTHOR]

INTRODUCTION Raising the price of cigarettes via taxation has been promoted by the World Health Organization as an important tobacco control strategy. Price elasticity of cigarettes is not uniform and is dependent upon individual and environmental determinants. Many studies have examined the determinants of price-induced smoking, taking into account sociodemographic characteristics and consumption patterns. Little research has been conducted on the association between anti-smoking environments and price-induced smoking behavior. This study addresses the deficit within the Chinese context. METHODS Participants were 2852 male smokers identified through a multi-stage survey sampling process encompassing 6 cities in China between July and December 2016. A standardized questionnaire tapped price-induced smoking reduction and related information. Both unadjusted and adjusted logistic regression methods were applied in the analyses. RESULTS In all, 25.5% (95% CI: 22.5-27.9) of smokers in this study decreased their smoking expenditures following the 2015 excise tax increase. The adjusted logistic regression analysis showed that increased exposures to an anti-smoking information environment (AOR=1.39; 95% CI: 1.10-1.79), restricted smoking in their home (AOR=1.67; 95% CI: 1.32-2.08) and workplace (AOR=1.43; 95% CI: 1.09-1.85) were more likely to report diminished cigarette smoking following the tax increases. CONCLUSIONS This study adds to understanding price-induced smoking behavior among urban male Chinese smokers. Strengthening of excise tax policies needs to intensify environmental smoking restrictions and public education campaigns to increase the sensitivity of cigarette price changes among smokers. [ABSTRACT FROM AUTHOR]

We study the effect of domestic corporate tax on firms' outward direct investment (ODI) decisions. We exploit a tax unification reform in China that raises corporate income tax rates on foreign‐funded firms but reduces those on domestic Chinese firms. Using a difference‐in‐differences estimator that compares the ODI of foreign affiliates and joint ventures with private domestic firms before and after the reform, we find that a higher domestic corporate tax rate increased the ODI of foreign firms, particularly for joint ventures with Chinese majority shareholders. We show evidence that the increases in firm ODI reflect production relocation out of China. [ABSTRACT FROM AUTHOR]

While previous studies have recognized the importance of resource tax in environmental governance, we know relatively little about whether resource tax can get a win–win both in corporate financial performance (CFP) and corporate environmental performance (CEP). Using China's resource tax reform (RTR) policy in 2016 as a quasi-natural experiment and adopting a difference-in-differences (DID) strategy, we estimate the real effect of resource tax on CFP and CEP. The results show that RTR increases the financial performance of the regulated firms by 32.26% and the environmental performance by 46.15% compared to the non-regulated firms, indicating that resource tax can promote firms' sustainable development. Mechanism analysis shows that the effect of resource tax is mainly driven by firms' technological innovation and productivity improvement. Moreover, we further find that RTR performs better for firms with weaker tax burden-shifting ability and firms located in areas with poorer resource endowments. Overall, our study not only provides evidence for the Porter hypothesis from the perspective of resource tax, but also offers important policy implications for developing countries in their pursuit of sustainable economic and environmental development. [ABSTRACT FROM AUTHOR]

Using Golden Tax Project III in China as a quasi-natural experiment, we investigate the influence of tax enforcement on green innovation based on the panel data of China's heavily polluting enterprises from 2012 to 2020. Our baseline results show that the Golden Tax Project III negatively affects green innovation, and the impact still exists after a battery of robustness and endogeneity tests. Mechanism analyses reveal that increasing financial constraints contributes to less green innovation. Furthermore, heterogeneity analyses show that the negative relationship is more prominent in non-state-owned enterprises, enterprises with fewer analyst coverage, enterprises with lower institutional shareholding, non-high-tech enterprises, and enterprises located in eastern region. Our research reveals a previously under-explored adverse consequence of the Golden Tax Project III, its hindrance to green innovation. Some implications are put forward to mitigate the negative effect of Golden Tax Project III on corporate green innovation. [ABSTRACT FROM AUTHOR]

This paper studies the effect of rural taxation on Chinese peasants' mobility towards urban areas. We find that the tax alleviation due to the tax-for-fee reform significantly reduces rural-to-urban migration, with a 10% decline in tax leading to a 10% reduction in migration. We provide compelling evidence that the result is not driven by unintended policy effects of the tax-for-fee reform in fostering rural non-agricultural job opportunities. The effect of taxation is more pronounced and precisely estimated on migration across provinces or at older ages. To the best of our knowledge this is the first study to identify the tax-induced migration among low-skilled and low-income laborers. [ABSTRACT FROM AUTHOR]

Enhancing taxation capacity is crucial to state building in developing countries. While numerous studies argue that political selection serves as a high-powered incentive mechanism for fiscal revenue collection, relevant empirical evidence is mixed. This study adopts a regression discontinuity (RD) design to estimate the magnitude of the career incentive effect by exploiting two institutional designs for political selection in China: the age threshold for promotion and regulated term limits. By analyzing the age threshold to enter the last promotion-eligible term (50–55 years old), our RD design shows that prefectural party leaders extract additional fiscal revenue to demonstrate their competence. We also show empirical support for the political competition phenomenon in which promotion tournaments become more intense when prefectural party leaders enter their last promotion-eligible term. [ABSTRACT FROM AUTHOR]

The widely acclaimed Capital and Ideology , though an important contribution to the inequality debates, is limited by its use of secondary sources and fiscal state framework in its historical analysis of China. Its arguments for a Confucian trifunctional society with property rights sacralized by nobles' and scholars' regalian functions, and persistently low and stagnant taxation in premodern China overly simplify the historical reality. Using primary Chinese sources, this article highlights the major oversimplifications. The information and issues presented here are also worth considering for similar social and fiscal studies of premodern China. [ABSTRACT FROM AUTHOR]

This article uses a case study of the Qin Empire to explore the ecology of an agrarian political system, analysis that has become possible because of the archaeological excavation of Qin administrative documents. Qin's power derived from photosynthesis, and its empire mobilized this energy and used it to conquer territory and expand its productivity. The state's power was based on its ability to extract taxes in grain from its subjects, store it in granaries, and then use it to feed laborers working on state projects. Grain and most other taxable materials were too bulky to move very far, so the government relied on a subcontinent-wide system of information gathering and processing that allowed officials at the capital to make decisions about local resource use. Qin's centralized bureaucratic system became the standard model of political organization in China, so it offers clues into the effects subsequent empires would have on their environments. [ABSTRACT FROM AUTHOR]

We compare the welfare states and taxation regimes of the two largest economies in the world, China and the United States, from 1992 to 2017. We begin with a comparison of each country's net social wage – that is, the difference between total benefits received by and taxes paid by labor – using two established methods. While the net social wage in the two countries exhibited similar trends, the increasing net social wage has distinctly different implications in the two countries due to their specific historical trajectories in the neoliberal era. In the US, the increasing net social wage reflects an ambivalent and reluctant response to workers' social reproduction. In China, it reflects institutional changes in the welfare state, which we interpret as the Chinese state's attempt to resolve the social-reproduction crisis caused by neoliberal reforms of the 1990s. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Emerging Economies & Policy is the property of JOEEP: Journal of Emerging Economies & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article focuses on French essayist Paul Claudel's interest in and attention to economic questions throughout his career. It highlights his early education and essay on the tea tax in England, as well as his positions in various countries where he remained concerned about commercial and economic interests. It mentions his reports on China's commercial movement, his involvement in the organization of a railway in China, and his observations on economic conditions in Germany and Brazil.

Background: Universal health coverage is a challenge to horizontal equity in healthcare financing. Since 1998, China has extended its healthcare insurance schemes, and individuals with equal incomes but different attributes such as social status, profession, geographic access to health care, and health conditions, are covered by the same health insurance scheme. This study aims to examine horizontal inequity in the Chinese healthcare financing system in 2002 and 2007 using data from two national household health surveys. Methods: Multi-stage stratified random sampling was used to select 3,946 households with 13,619 individuals in 2002, and 3,958 households with 12,973 individuals in 2007. A decomposition method was used to measure the horizontal inequity and reranking in healthcare finance. Results: Over the period 2002–2007, the absolute value of horizontal inequity in total healthcare payments decreased from 997.83 percentage points to 199.87 percentage points in urban areas, and increased from 22.28 percentage points to 48.80 percentage points in rural areas. The horizontal inequity in social health insurance remained almost the same in urban areas, at around 27 percentage points, but decreased from 110.90 percentage points to 7.80 percentage points in rural areas. Horizontal inequity in out-of-pocket payments decreased from 178.43 percentage points to 80.96 percentage points in urban areas, and increased from 26.06 percentage points to 41.40 percentage points in rural areas. Conclusion: The horizontal inequity of healthcare finance in China over the period 2002–2007 was reduced by general taxation and social insurance, but strongly affected by out-of-pocket payments. Increasing the benefits from social health insurance would help to reduce horizontal inequity. [ABSTRACT FROM AUTHOR]

To motivate public participation in climate change mitigation, both "carrot" policies that create positive incentives for mitigated carbon and "stick" policies that create negative incentives for emitted carbon have been widely applied. Given the joint deployment of these measures, a key question is whether they are compatible with each other. Focusing on the Low-Carbon Reward Scheme (LCRS) and carbon taxes, two prominent proposals on China's climate policy agenda, this study evaluates how one incentive policy affects public support for the other. The results of a large survey experiment with Hangzhou residents indicate a two-way crowding-out effect, wherein introducing the LCRS diminished support for the tax, albeit primarily among LCRS proponents, and introducing the tax reduced support for the LCRS. Aligning with the proposed account, crowding out was driven by a decrease in policy effectiveness and fairness perceptions. These findings reveal a contradictory relationship between carrot and stick policies at the citizen level and illuminate the underlying mechanism. • Both carrot and stick policies are applied to motivate climate mitigation behaviors. • We identify a two-way crowding-out effect between these policies in public opinion. • Introducing a stick (carbon tax) reduces support for a carrot (low-carbon reward). • Introducing a carrot reduces support for a stick among people favoring the carrot. • Crowding out is driven by weakened policy effectiveness and fairness perceptions. [ABSTRACT FROM AUTHOR]

The digital business model emerges as a new business model and gradually penetrates global industries, and countries are putting in place various digital strategies to support their development. As one of the important tools, taxation strategies are highly expected by countries, which not only describe the economic development pattern of a country but also show the digital leadership of a country. Some countries have introduced their own unilateral digital services tax to govern their digital business models, while others have looked more to the global minimum tax, resulting in the current situation of both a unilateral digital services tax and a global minimum tax. However, both of them are of great reference value for the tax governance of digital business models. This paper compares the development history of digital tax strategies, categorizes, and analyzes the design logic of existing digital tax strategies, and takes China, one of the major digital economy countries, as an example to propose China’s digital tax strategies by drawing on international experience. We set an example for the design of digital economy tax strategies for countries around the world so that they can manage digital business models more efficiently. [ABSTRACT FROM AUTHOR]

The political connection between the state and firms in the context of China's corporate restructuring has been little explored. Using the clientelist framework and unpacking the incentives of both firms and the state, we analyse political connections as repeated patron–client exchanges where the politically connected firms can help the state fulfil its revenue imperative, serving as a failsafe for local authorities to ensure that upper-level tax quotas are met. Leveraging original surveys of the same Chinese firms over an 11-year period and the variations in their post-restructuring board composition, we find that restructured state-owned enterprises (SOEs) with political connections pay more tax than their assessed amount, independent of profits, in exchange for more preferential access to key inputs and policy opportunities controlled by the state. Examining taxes rather than profits also offers a new interpretation for why China continues to favour its remaining SOEs even when they are less profitable. [ABSTRACT FROM AUTHOR]

Copyright of Asia-Pacific Social Science Review is the property of De La Salle University Manila and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In this Policy Watch study, we explore the different approaches to corporate income tax (CIT) setting in three economically significant regions: USA, EU, and People's Republic of China (PRC). We characterize tax-setting in the three regions as occurring at three hierarchical levels and examine the impact of this on tax competition. We find that there is considerable heterogeneity across the regions. The approach in the PRC is particularly notable. While the PRC has established centralized rate of CIT at the highest level, it is unique in having a tax-sharing system with its lower tiers of government. This connection between the different levels of government within the PRC plays a crucial role in China's unique CIT rate-setting agenda that results in intense and tacit inter-jurisdictional tax competition. [ABSTRACT FROM AUTHOR]

PwC reportedly faces a minimum penalty of $137.9 million according to sources familiar with the matter; in other news, KPMG merges its Swiss and UK arms [ABSTRACT FROM AUTHOR]

This paper examines the relationship between China's changing economy and its global business tax diplomacy. Three trends dominate: China is becoming a net capital exporter, emerging as a major consumer market, and is home to digital giant firms including Baidu, Tencent and Alibaba. The resulting drive to promote both 'going out' and 'bringing in' foreign direct investment has led China to engage selectively and strategically with Western-led institutions. We show how China variously challenges, defends, and develops alternatives to global tax standards in three cases: global efforts to tackle corporate tax avoidance, bilateral tax treaty negotiations, and administrative tax cooperation. [ABSTRACT FROM AUTHOR]

The goal of this paper is to study the contribution of taxation reformation to the provision of new quality of economic growth in Russia and China. The methodology is based on determining the interdependencies between the indicators of quality of economic growth and the indicators of taxation in Russia and China in 2003-2021 with the help of regression analysis, which allows verifying the offered hypothesis. A set of other econometric methods is also used. Novelty of this research is ensured by formation of a scientific and methodological basis for the complex qualitative treatment of economic growth from the positions of such aspects as conditions for business, digitalization, quality of life, investments, inflation, import, export, and unemployment. Originality of the research is achieved by means of a new - qualitative - view at economic growth and by determining the new quality of economic growth in Russia and China with a comparative research based on thorough analysis of their experience (which has not been sufficiently studied). Uniqueness of the research is due to the systemic view at taxation as a mechanism that ensures - at the same time - the general government structural balance and acceleration of the rate and increase of quality of economic growth. [ABSTRACT FROM AUTHOR]

To match national development goals and increase in the tax base, the government must embed a taxation system in economic and social contexts. Since the founding of the People's Republic of China, the development of taxation can be divided into three stages: one that is embedded in danwei, one that is embedded in enterprises, and one that is embedded in society. The corresponding national development goals include stimulating economic growth, promoting coordinated economic and social development, and propelling state governance. As the tax base in China shifts from production to redistribution and wealth accumulation in the circulation of the national income, the taxation system will gradually shift from embedment in the economy to embedment in society, posing new challenges to taxation system reform. Future reform should deepen the extent to which taxation is embedded in society while keeping taxation embedded in a broad economic base. This will help to achieve the goal of building a "consensually strong state." [ABSTRACT FROM AUTHOR]

This study examines how asset values by industry sectors are affected by different depreciation methods. We theoretically show that estimating depreciation rate by the Perpetual Inventory Method (PIM) contains more information than the method by Depreciation Expense as Accounting Item (DEAI), which are equivalent under certain conditions. Using data of 37 industrial sectors in China from 2001 to 2016, we estimate depreciation rates by sectors using both PIM and DEAI methods, which enable us to estimate capital stock and capital efficiency by sectors. By the panel estimation, depreciation rates estimated by both PIM and DEAI methods significantly increase with the enterprise's profits after tax defined by that profits before tax minus tax. Our result is consistent with the prediction of the economic depreciation hypothesis, implying that tax shield of depreciation that raises corporate after-tax cash flows to the firm could improve corporate investments for replacement by scrapping the old equipment. [ABSTRACT FROM AUTHOR]

• A new traffic restriction policy exempts battery electric vehicles (BEV). • The policy affects consumer choice between conventional vehicles (CV) and BEV. • The policy is meaningful for emission reduction at less consumer surplus cost. • Vehicle purchase tax and carbon tax are supplementary measures at different stages. • Game analyses reveal the best combination of traffic restriction and taxation. In busy metropolitan areas, traffic restrictions based on the last digits of license plates effectively ease traffic jams and improve air quality. Recently, policy-makers in China exempted battery electric vehicles (BEV) from traffic restrictions to promote their diffusion in place of conventional vehicles (CV). To examine the impacts of such an exemption on consumers and manufacturers as well as the environment, this study models the duopoly competition between BEV and CV manufacturers as a Cournot game. The numerical analyses compare three traffic restriction policies concerning BEV and CV, and reveal the pros and cons of each. In particular, the BEV-exempted policy promotes customer adoption, industry development, and environment protection with the least consumer surplus loss. As supplementary measures, relevant vehicle purchase tax and carbon tax may make such a policy more effective, respectively, in short and long terms. [ABSTRACT FROM AUTHOR]

Using secondary data from the 2017 online survey of 736 non-profit social service employees in urban China, this study provides a complete description of the financial well-being of the non-profit social service workforce and examines correlates of financial well-being. Results show that non-profit employees' household income is lower than the disposable income of a typical urban household. Nearly one-third of social service professionals have short-term unsecured debts, 10 per cent do not have public health insurance coverage and another 22 per cent report economic hardships caused by large unexpected expenses. Correlates of financial well-being include individual characteristics (e.g. age, education and marital status) and organizational characteristics (type, revenue and size). New services (e.g. employment-based programmes and financial services) are proposed to promote financial well-being of non-profit social service employees in China. [ABSTRACT FROM AUTHOR]

Prior literature documents puzzling evidence revealing that tax avoidance activities do not affect firm‐specific risk. Using an extended US sample, we find that lower cash effective tax rates (ETRs) are associated with higher future return volatility, supporting the traditional view of tax risk–return trade‐off. In sharp contrast to the US evidence, our analysis of Chinese firms suggests that Chinese state‐owned enterprises (SOEs) with lower cash and GAAP ETRs tend to have lower future risk. In addition, we adopt a difference‐in‐differences approach based on the variations generated by two exogenous, anti‐tax avoidance regulations in China but find no evidence suggesting a causal relationship between tax avoidance and firm risk. Overall, our results suggest that the relationship between tax avoidance and risk varies across countries, sample periods and tax aggressiveness measures, and we highlight the importance of addressing the endogenous nature in future research. [ABSTRACT FROM AUTHOR]

Our paper is the first to examine the impact of government‐firm collusion on firm tax avoidance in China by applying an instrumental variable approach. We take political turnover of local leaders as an external shock to the existing collusion and investigate firms' tax avoidance activities during local leadership transition. By using data on political turnover of prefectural leaders and listed firms from 2007 to 2014, we find that political turnover leads to the instability of existing collusion, and consequently a decrease in firm tax avoidance. This provides evidence of the pre‐existing collusion between government and firms. We then rule out the possibility that such change is driven by the effect of political uncertainty or tax competition by considering the heterogeneous effect of firms and cities. Finally, we show that firms' political connections, captured by political ties and ownership of firms, stabilize the existing collusion and help firms maintain their advantage while facing external political shocks. [ABSTRACT FROM AUTHOR]

Will such an audit system outside the taxation bureaucracy undermine or reinforce the effect of the under-institutionalized tax administration system in seeking cooperation from private businesses? Similarly, Zhang argues that the under-institutionalized tax administration system is critical in reducing the tax burden for private businesses, as the local tax bureau has discretion in tax collection. [Extracted from the article]

We study how the enforcement of value-added tax (VAT) affects Chinese firms' evasion of payroll tax, which is collected by weakly empowered agencies. Using the central government's 2005 repeal of the agricultural tax to measure fiscal squeeze and subsequent enforcement effort of VAT collection, our instrumental variable estimation finds that the VAT enforcement leads to a significant increase in the payroll tax evasion. Examining firm heterogeneity and real responses suggests that increased payroll tax evasion mainly stems from cost optimization by small and cash-constrained private firms. Our paper echoes a growing literature to highlight the importance of understanding compliance spillover across taxes. [ABSTRACT FROM AUTHOR]

Despite the global economic downturn, China's taxation continues to grow rapidly. Although many scholars attribute this phenomenon to macro factors, in this study, we investigate this issue from the perspective of combining enterprises and tax enforcement. Through a regression analysis of data from Chinese listed firms over the 2008–2018 period, we find that tax enforcement can lead to the stickiness of corporate tax expenses, that is, the percentage decrease in tax expenses for a decrease in sales revenue is less than the percentage increase in tax expenses for an equivalent increase in sales revenue. Further analysis shows that tax stickiness exists in multiple taxes, with business tax stickiness being the highest. Tax stickiness provides a new explanation for China's taxation to maintain rapid growth during economic downturns. [ABSTRACT FROM AUTHOR]

This article explores the influence of a host country's conditions on foreign equity investment decisions made by China‐based firms using the assumptions of the institutional theory and transaction cost approach. We use multinomial logit regression to analyze a sample of 1,018 cross‐border investments by Chinese firms categorized into majority acquisitions, minority acquisitions, joint ventures (JVs), and venture capital. According to our findings, Chinese investors prefer to conduct foreign direct investment in the same industry. This, in turn, highlights their desire to gain market influence and learn or obtain strategic knowledge and resources. Furthermore, taxation is proved to encourage the establishment of foreign JVs. The interaction between the host country's tax levels and majority acquisitions in the same industry reveals the concern of Chinese investors with after‐tax returns and influence in the new market. [ABSTRACT FROM AUTHOR]

China's 2018 individual income mx (IIT) law reform introduced itemised deductions, increased the standard deduction and expanded lower tax rate bands. On the one hand, this may help reduce the income tax burdenfor the relatively low-income group, but, on the other hand, the tax base of IIT would be further reduced, which may also reduce the redistributive e#ect of income taxation. However, the dominance of income tax extracted from wages and salaries remains the same. This may be related to the dijferent treatment of income Aom labour and income from capital, which benefits those with more financial resources and thus discriminate against the less prosperous. Income ./Tom employment is also subject to strict tax administration. This article evaluates the sufficiency and equity of the reformed JIT law in China. Given that the Chinese government intends to gradually increase the proportion of direct taxation in its total tax revenue, the fairness of its income tax system should be one of the prioritised areas for any future reform. [ABSTRACT FROM AUTHOR]

This paper explores the effects of a government tax policy in a growth model with economic transition and toxic housing bubbles applied to China. Such a policy combines taxing entrepreneurs with a one-time redistribution to workers in the same period. Under the tax policy, we find that the welfare improvement for workers is non-monotonic. In particular, there exists an optimal tax at which social welfare is maximized. Moreover, we consider the welfare effects of setting the tax at its optimum. We show that the tax policy can be welfare-enhancing, comparing to the case without active policies. The optimal tax may also yield a higher level of welfare than the case even without housing bubbles. In addition, our simple numerical exercise shows that the optimal tax rate is about 23%;, and social welfare is significantly improved with such a tax policy. Finally, we extend the benchmark economy to a multi-period setting and calibrate the model to China. Our results show that a 20%; tax rate can speed up economic transition and increase output growth. Between 1998 and 2012, aggregate consumption is 4.86%; higher under active tax policies. [ABSTRACT FROM AUTHOR]

The second largest economy in the world and one of the five existing experiences of Real Socialism, China surprises for its capacity for growth, innovation and development. Although it is defined as a unitary state, many of its practices are decentralized. In this way, this work brings a survey of the tax system that has existed since 1994 in China, the Tax-Share System, detailing its taxes, budget expenditures, and the regional issue. In addition, it also focuses on the division of these variables between the levels of central and local government. [ABSTRACT FROM AUTHOR]

Using data from China Annual Survey of Industrial Firms and addressing potential endogeneity problem, we find that corporate tax burden in China is procyclical during recessions and countercyclical during booms. The cyclicality is stronger for enterprises whose corporate income taxes are levied by Local Tax Bureau (LTB). Procyclicality of corporate tax burden during recessions is larger for enterprises located in county, non‐state‐owned enterprises (non‐SOEs), non‐high‐tech enterprises and large‐medium enterprises. Furthermore, tax quotas and growth targets of local governments enhance procyclicality during recessions and the countercyclicality of corporate tax burden during booms. Tax collection and government spending are important channels through which tax quotas and growth targets affect the cyclicality of corporate tax burden, respectively. This paper provides important policy implications for China during economic recessions. [ABSTRACT FROM AUTHOR]

The impact of the intra-government (vertical) tax competition on firms' location choices is seldom studied in the literature. In this paper, we use the local corporate income tax revenue retention rate to represent the outcome of the vertical tax strategic interactions between the central and local governments in China. Theoretically and empirically, we find that a higher local corporate income tax revenue retention rate attracts newly-established firms, even when we simultaneously take into account the effect of the horizontal tax competition, i.e., the local effective corporate income tax rates. Such positive effect of the local corporate income tax revenue retention rate on firms' location decisions is robust to a battery of sub-sample analyses and alternative model specifications, and is heterogeneous across firms with different ownership structures. This effect is more prominent in provinces with weaker agglomeration forces as well. [ABSTRACT FROM AUTHOR]

We examine whether the Chinese government's anti‐corruption enforcement reduces corporate tax burdens. Using a difference‐in‐difference approach, we find tax burdens of firms located in corrupt political leaders' jurisdictions are lower after these leaders were deposed. An analysis of two tax policy changes shows that the reduction in tax burden is more pronounced when corrupt politicians had more power in levying taxes. [ABSTRACT FROM AUTHOR]

Background and Aims: Trade liberalization is hypothesized to increase the availability of imported alcoholic beverages in importing countries. This study provides the first longitudinal analysis of the impact of preferential trade agreements (PTAs) on alcohol imports. Design Panel data comprising alcohol‐product (n = 15) by importing country (n = 16) observations from 1988 to 2016 constructed from global databases. The relationship between PTA status, tariff level and alcohol imports were assessed using a log‐linear model. Unobserved heterogeneity was addressed through a combination of differencing and product‐year fixed‐effects. Setting: Australia and its 16 free trade partners (PTA year in parentheses), classified by low [< 50%: Brunei (2010), Cambodia (2010), Indonesia (2010), Malaysia (2010, 2013), Myanmar (2010), Thailand (2003, 2010) and Vietnam (2010)] and high (> 50%: Chile (2009), China (2015), Japan (2015), Korea (2014), Laos (2010), New Zealand (1983, 2010), Philippines (2010), Singapore (2003, 2010) and United States (2005)] percentage of alcohol consumers in the population. Measurements Independent variables were the existence of a PTA with Australia and tariff (border tax) rate on Australian products. Outcomes were (log) Australian imports; and a binary indicator of any imports from Australia. Findings Introducing a PTA has been associated with a statistically significant increase in the share of Australian alcoholic beverage imports in its partner country's total alcoholic beverage import supply, mainly from trade in new alcoholic beverage categories (0.067, P < 0.05). Tariff rate reductions have been associated with increased imports in both low and high consumption country groups; however, the effect has been larger in low consumption countries (−0.189, P < 0.01 compared with −0.016, P < 0.05). The impact of PTA adoption was significant in low consumption countries only (1.141, P < 0.05). Conclusions: Preferential trade agreements involving Australia have been positively associated with alcohol imports from Australia in countries with low rates of alcohol consumption, due primarily to trade in new products. [ABSTRACT FROM AUTHOR]

China officially launched seven state pilot ETS programs starting in 2013 and initiated a national ETS in 2017 respectively. The many accumulated experiences from the pilot programs include such findings as the importance of setting realistic targets balancing the needs for carbon reductions with those of economic growth and pollution control and the need for legislation specifying the actions to be taken, provisions for disclosure, allowance allocations, offsets, infrastructure building, monitoring reporting and verification, and adoption of a compliance mechanism. Deficiencies in the pilot programs are evaluated, such as those derived from lack of a national legal basis and unified rules for the carbon market, an excess of free allocation of allowances, a lack of liquidity of the market, lenient punishment for non-compliance, and absence of a sound monitoring and regulatory mechanism. The requisites for sound market-based programs are described, with particular emphasis on the need for a comprehensive legal basis on which programs can be built. The pluses and minuses of cap and trade market-based programs versus carbon taxes are explored in depth, including the possibilities of combining the two systems. Various bottom up and top down approaches are explored and the key elements of success and failure. [ABSTRACT FROM AUTHOR]