Based On Fiscal Decentralization Provincial Tax Competition Research

In the current domestic tax competition, inter-provincial tax competition has become a common phenomenon. Harmful tax competition will lead to a significant negative effect, so we should prevent inter-provincial harmful tax competition. From the perspective of fiscal decentralization, this paper studies China's inter-provincial tax competition, trying to find a way to coordinate inter-provincial tax competition. This would play a positive role of tax competition, inhibition of its negative effects.It is found that, in China's reform and opening up, inter-provincial tax competition generated because of financial decentralization. Fiscal decentralization is a major factor in tax competition. Inter-provincial tax competition is deteriorating because fiscal decentralization faults. So we need a tax legal system, a reasonable division of the provincial government's power and financial power, and we should improve the fiscal transfer payment system, improve tax preferential system, improve tax administration system, and establish a inter-provincial tax coordination mechanisms. After doing so, inter-provincial tax competition would remain healthy.There are four new ideas in this paper:the conception of inter-provincial tax competition, the deterioration of inter-provincial tax competition because of the shortcomings of fiscal decentralization, improvement of the fiscal decentralization, how to coordinate inter-provincial tax competition.