A Research On Factors Influencing China’ Tax Revenue

Since the reform and opening up policies, China has achieved rapid and stable economic development. Along with the rapid economic growth, the industrial structure also has been optimized. The proportions of the secondary industry and the tertiary industry has have been increasing gradually. The fiscal expenditure has also been rising and it reached 12.9143 trillion Yuan in 2013. At the same time, China’s tax revenue has been increasing as well. It has amounted to 110497 trillion Yuan in 2013, about 20 times of that in 1994. However, tax revenue growth is not so stable as economic growth. Before the 1994 tax reform, China’s tax revenue grew slowly. However, after the reform, China’s tax revenue began to grow fast and its growth rate began to exceed that of GDP and it is still going on.In the past 20 years, China’s tax revenue has achieved great growth. There are many factors lead to this result. Some are economic factors, some are policy factors and others are tax-collecting factors. And the economic factors are very important ones. The level of GDP is one determining factor of the tax base, and the economic growth greatly affects the rate of tax revenue growth. Economic factors are mainly the gross domestic product (GDP), industrial structure, fiscal requirement and the tax system. In these four factors, the gross domestic product has the greatest impact on the tax revenue.This article includes five parts. The first part is the introduction and it introduces the research background and literature review. The second part analyses the impacts of each influencing factors. The third part analyzes the economic factors affecting tax revenue in China. The fourth part focuses on the impact of different economic factors on tax revenue in China using econometrics methods. The fifth part concludes the analysis conclusions and gives some policy recommendations to China’s tax reform in the future.