Information system and corporate income tax enforcement: Evidence from China

Xiao, Chengrui; Shao, Yuchen

doi:10.1016/j.jaccpubpol.2020.106772

Cited by 50 publications

(25 citation statements)

References 37 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The main view is that the vertical fiscal imbalance will inhibit the tax efforts of local governments (Boetti et al, 2012;Jia and Ying, 2016), and the horizontal fiscal imbalance amplifies the negative impact of the vertical fiscal imbalance on the tax efforts of local governments (Di Liddo et al, 2019). A few scholars believe that when the local fiscal pressure increases, the tax efforts of the local governments will also increase (Chen, 2017;Dang et al, 2019;Xiao and Shao, 2020). However, Ma and Li (2012) believed that local governments would not only maintain tax collection and administration under fiscal pressure but also directly transfer the pressure to enterprises.…”

Section: Literature Reviewmentioning

confidence: 99%

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

Deyun

Yiqing

2023

Front. Environ. Sci.

View full text Add to dashboard Cite

As China’s economy enters a new era, fiscal pressure is growing rapidly. How will local governments select their preference of tax efforts under pressure? Are they facing or retreating? This paper selects macro data of 30 provincial administrative regions from 2000 to 2018 and uses the instrumental variable method and threshold regression model. While the paper put fiscal pressure, land-transferring fees, local government debt, and transfer payments into the same regression equation to test the causal relationship between fiscal pressure and the selection preference of tax efforts among Chinese local government. We found that local governments prefer to increase tax efforts under fiscal pressure. Moreover, the heterogeneity analyses prove that eastern local governments prefer higher tax efforts. When the tax and economic growth rates are low, local governments have less selection preference to strengthen tax efforts. Threshold regression tests show that transfer payments have a moderating effect on local tax efforts, and transfer payments have a threshold effect. When transfer payments are under the minimum threshold value or above the maximum threshold value, it may lead to the inaction of local governments, who do not try their best to raise tax efforts. These findings are valuable in policy-making for the construction of sustainable public finance.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

Deyun

Yiqing

2023

Front. Environ. Sci.

View full text Add to dashboard Cite

show abstract

“…Using cross-country data, Kochanova et al (2020) found that e-filing of taxes and eprocurement implementation improve the capacity of governments to raise and spend fiscal resources through lowering tax compliance costs, improving tax collection and public procurement competitiveness, and reducing corruption. Xiao and Shao (2020) showed that digitalization of tax administration in China not only improves tax collection and management efficiency through electronic tax reporting, but also strengthens government's ability to monitor tax source and verify tax-related information, thereby deterring firms from underreporting accounts receivable or over-reporting accounts payable, inventory and the number of employees. Alm (2021) analyzed the impact of electronic tax filing on corporate tax avoidance in the U.S. and found that electronic compliance reduces tax avoidance by increasing transparency and reducing the opportunity for manipulation of financial information.…”

Section: Tax Administration Digitization and Corporate Tax Avoidance:...mentioning

confidence: 99%

Tax Administration Digitization and Corporate Tax Avoidance: A Quasi-Natural Experiment Based on the Golden Tax III Project in China

Su¹

2023

Preprint

View full text Add to dashboard Cite

This paper contributes to the literature by exploring the governance effect of tax administration digitization on corporate tax avoidance. Using data from 2,032 firms publicly listed in China during 2010 and 2020, our paper is among the first to report that the development of digital technologies such as big data and cloud computing has a restraining effect on corporate tax avoidance behavior. Our study is based on the Golden Tax III project implemented by the Chinese government from 2013 to 2016 as a quasi-natural experiment. Our time-varying difference-in-differences (DID) model shows that the digitization of tax collection and management effectively reduces corporate tax avoidance behavior. Moreover, this impact is larger for private firms, firms in regions with low financial development, firms with low auditor quality, and firms with low internal control quality. Our results are robust to parallel trend tests, placebo tests for causal inference, alternative measures of tax avoidance, and other tax-related policy specifications. Our findings suggest that governments should continue to promote digitization of tax administration, create a fair business environment for the development of private enterprises, deepen market-oriented reform in regions with low financial development, and improve the internal control mechanisms of publicly listed firms. JEL Classification: H26; H32; G30

show abstract

“…Lin et al (2018) demonstrated that the likelihood of punishment being imposed on a company for underestimating taxable income will be significantly less if the board members are politically connected. From the information technology perspective, the implementation of the CTAIS-3 reduces the information asymmetry between tax authorities in various regions and improves tax enforcement, which suppresses tax avoidance (Xiao and Shao, 2020). Li et al (2020) found that the adoption of the CTAIS-3 decreases tax sheltering levels by 1.88 percentage points.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Existing studies generally adopted tax efforts to measure tax enforcement (Guedhami and Pittman, 2008;Ghoul et al, 2011;Lin et al, 2018); however, this indicator is endogenous to the level of regional economic development and the legal system, which makes the impact of the environment inconducive to causal inference. Xiao and Shao (2020) and Li et al (2020) found that the CTAIS-3 implemented by the Chinese government in 2013 can alleviate the information asymmetry of tax authorities in various regions, effectively combat corporate tax evasion, and strengthen tax enforcement; therefore, it can effectively capture changes in tax enforcement. Moreover, the CTAIS-3 was implemented in batches and gradually launched in different provinces and cities.…”

Section: Tax Enforcementmentioning

confidence: 99%

The impact of tax enforcement on corporate investment efficiency: evidence from the tax administration information system

Zhang

Chen

Liao

2022

Accounting & Finance

View full text Add to dashboard Cite

Information technology is essential in tax enforcement. This study found that stronger tax enforcement after the tax administration information system reform improved corporate investment efficiency by reducing excessive investment expenditures. The effect is more significant under higher local government fiscal pressure, poorer external information environments, weaker external corporate governance, and stronger tax avoidance motivation. The main mechanism is based on the quality of the accounting information. This study enriches the literature on the economic consequences of tax enforcement and adds investment efficiency as an influential factor, which provides implications for international governments to use information technology to strengthen tax enforcement.

show abstract

Information system and corporate income tax enforcement: Evidence from China

Cited by 50 publications

References 37 publications

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

Tax Administration Digitization and Corporate Tax Avoidance: A Quasi-Natural Experiment Based on the Golden Tax III Project in China

The impact of tax enforcement on corporate investment efficiency: evidence from the tax administration information system

Contact Info

Product

Resources

About