Taxation Plan,corporate Tax Burden And Corporate Investment

Since the Reform and Opening up,China has achieved a historic transformation from a highly centralized planned economy system to a vibrant socialist market economy system.In this process,government revenue basically followed the budget management system with taxation plan as the core under the planned economy system.The history of taxation plan can be traced back to the early days of the founding of People’s Republic of China.The annual taxation plan is not only the decomposition and implementation of the fiscal revenue budget,but also the specific goal of tax collection by tax authorities and an important basis for superior assessment of tax work.One end of the taxation plan is the tax authority,and the other end is the enterprise.The process of completing the taxation plan by the tax authority is also the process of enterprise taxation.The economic impact brought by taxation plans has broken through the research scope of finance and taxation,and entered the micro field of corporate finance.The early research on taxation plan mainly analyzed the relationship between taxation plan and tax collection and management,taxation plan and tax growth,and taxation plan and tax governance in accordance with the law.In recent years,scholars have begun to pay attention to the impact of taxation plans on corporate finance.However,most of the research focuses only on local budget arrangements,rather than taxation plans executed by tax authorities,ignoring the unique issuance mechanism of taxation plans under the tax sharing system.After the reform of the tax sharing system,the taxation plans of provincial-level national tax bureaus were mainly issued by the central SAT(State Administration of Taxation),while the taxation plans of provinciallevel LAT(Local Administration of Taxation)were mainly issued by the provincial government.The taxation plans issued by the central SAT represent the will of the central government,while the taxation plans issued by the provincial government represent the will of local governments.An important question is whether there are differences between the taxation plans issued by the central SAT and those issued by local governments.Based on the background of tax sharing system,this paper first studies the impact of taxation plan on corporate tax burden.Manually collecting the taxation plan data of the SAT and LAT each province,statistically analyzing the completion of the taxation plan,and comparing the differences between the taxation plan issued by the central SAT and the taxation plan issued by provincial government.This study finds that the provincial SAT failed to complete the taxation plan more times than the provincial LAT,but generally speaking,the failure of both the SAT and the LAT to complete the taxation plan is relatively rare.Before 2008,the target growth rate of the taxation plan issued by the central SAT was generally close to the target growth rate of the taxation plan issued by provincial governments.After the international financial crisis in 2008,the central SAT lowered the target growth rate of the taxation plan,but the target growth rate of the taxation plan formulated by the provincial government only declined briefly,then began to rise against the GDP trend,and the deviation from the actual economic growth increased correspondingly.At the same time,the national tax inspection revenue and the tax inspection verification rate have increased significantly since 2008,revealing that the tax authorities levy taxes by tightening tax collection and management.Subsequently,the empirical test based on the sample of A-share listed companies found that the greater the pressure of the tax authorities to complete the annual taxation plan,the higher the corporate tax burden.Moreover,this phenomenon mainly occurs in areas with high target growth rate of taxation plan at the beginning of the year.The heterogeneity test based on the nature of property rights shows that non-state-owned enterprises are more affected by tax inspection.The process of completing the taxation plan is also the process of tax collection.Therefore,how do the tax authorities determine the tax intensity of each enterprise? In this regard,scholars mainly explain it by the relationship between enterprises and the government,say concretely,from this angle of the nature of property rights and the political connection of senior executives.This question needs to be further studied,because when the relationship between different enterprises and the government is similar,for example,the property rights of the two enterprises are the same,and the tax intensity is still different among enterprises.value-added tax is the largest tax payment of Chinese industrial enterprises,and is collected and managed by the SAT alone.In order to eliminate the noise caused by the differences between the SAT and the LAT,this paper studies the differences in tax intensity between enterprises based on valueadded tax.This study finds that the fixed assets and the number of employees of the enterprise can meet the "objective,relevant and legal" requirements of law evidence,which has become the focus of the SAT on enterprises.The empirical study finds that the scale of fixed assets and employees significantly increased the effective tax rate of value-added tax,especially when the SAT is under great pressure to complete the taxation plan.Under the pressure of completing the taxation plan,the tax authorities will strengthen taxation accordingly.However,this may only be half part of the story,because there is a "ceiling" on increasing taxes by strengthening taxes.In other words,simply relying on the tax authorities to strengthen taxation may still be unable to complete the taxation plan.Taxation plan is the decomposition and implementation of fiscal budget revenue.Whether taxation plan is completed or not directly determines whether the fiscal budget of local governments can be successfully completed.From a broader perspective,in addition to relying on tax authorities to strengthen taxation,local governments may also need to actively intervene in economic operation.Compared with consumption and export,the government has a relatively direct impact on investment.This paper finds that the local government’s taxation plan significantly drives enterprises to invest,and enterprises also obtain more long-term debt.However,the cost of expanding investment is the decline of investment efficiency and the rise of over investment level.Further research finds that local governments that benefit from the principle of levying value-added tax at the place of production are more inclined to promote corporate investment,and there is a substitution relationship between "promoting corporate investment" and "strengthening taxation" : when the local tax authorities’ taxation is strong,the promotion effect of taxation plan on corporate investment decreases significantly.Compared with "strengthening taxation",inefficient investment driven by taxation plan is more hidden,and the negative effects caused by it deserve more attention.The academic value of this article mainly includes the following points: Firstly,this article expands the understanding of tax burden changes in Chinese enterprises.Existing literature has overlooked the impact of tax management systems on corporate tax burden.This article creatively quantifies the pressure of tax authorities to complete taxation plans based on unique data collected manually.The study found that taxation plans are an important factor causing changes in the tax burden of Chinese enterprises,promoting research on corporate tax burden issues.Secondly,this article helps to clarify the selection of scale substitution variables in the study of corporate tax burden.Existing literature mainly draws on Western research and selects alternative variables for enterprise size according to convention.This article creatively proposes and quantifies the concept of "visible scale" of enterprises based on China’s tax collection and management practices,revealing how visible scale of enterprises affects tax collection and management,and thus affects corporate tax burden.Thirdly,this article helps to clarify the specific meaning of "government intervention" in the study of government intervention in enterprise investment.Existing literature usually identifies government intervention based on local fiscal pressure,but local fiscal pressure itself is a general and vague concept.This study found that the main purpose of local government intervention is to complete taxation plans,which can better explain local government intervention in enterprise investment.Therefore,this article promotes research on government intervention in corporate investment.The application value of this article mainly includes the following points: Firstly,this article has policy reference value for how to achieve the goal proposed by the State Council of "collecting taxes in accordance with the law,fully collecting receivables,and not collecting excessive taxes".The research in this article indicates that in order to achieve "lawful collection,full collection of receivables,and no excessive taxation",the first step is to reform the tax management system and relax the rigid constraints of taxation plans on tax authorities.Secondly,this article has policy reference value for the implementation of tax and fee reduction policies in the post pandemic period.The research in this article indicates that in order for tax and fee reduction policies to take root,it is not only necessary to design tax and fee reduction policies,but also to reform the tax management system and be vigilant against the offsetting effect of local unreasonable taxation plans on tax and fee reduction policies.Thirdly,this article has policy reference value for how to deepen supply side reform.The research in this article indicates that "cost reduction" and "deleveraging" are interconnected,and appropriately reducing tax targets can not only reduce corporate tax burden,but also help control corporate leverage.