An Empirical Study On Tax Credit Risk Measurement

As an important part of social relationship, the relationship between tax bureau and taxpayer is stipulated and regulated by rules of tax law. And the precondition that the effect of the rules of tax law is to work well is that everyone in the society has contractual spirit and consciousness of compliance, and answer for his action. A good relationship of tax credit can reduce the cost of taxation and government's administration effectively, and improve social welfare. So in market economy, there exist uncertainty and risk in tax administration as well. The risk is mainly caused by asymmetric information between tax bureau and taxpayer, because the asymmetric information is likely to cause the problem of moral risk. The information acquired by taxpayers and tax bureau is asymmetric and the resources of tax administration are limited, it is impossible to detector all of the taxpayers'hiding behaviors, so the tax credit risk is inevitable.According to traditional model of tax administration, the uppermost method which the tax bureau uses for avoiding the credit risk of tax is to increase the power of inspection and punishment. Tax bureau expects that such high-handed and coercive method can increase taxpayers'degree of tax compliance. But the result isn't satisfying in practice. The reason is that tax bureau can't reach the ideal level of inspection and punishment basing on present technology and administration resources in hand.So in this article, I bring forward such attitude: sine it's impossible to eliminate the tax credit risk entirely in existing condition, whether can we limit this credit risk in acceptable level to gain the most risk-adjusted return by effective administration of tax credit risk? In order to study this topic, I take lessons from sophisticated experience and model of credit risk management in commercial banks; try to establish a model of tax credit risk management and a model of risk measures, which suit for tax administration; and prove this model by empirical study. Basing on the result of empirical study, my opinion is proved.