Financial Pressure,Institutional Environment And Enterprise Tax Burden

In recent years,while the growth of fiscal revenue slowing down,fiscal expenditures increasing rapidly and the budget deficit rising,the government faces enormous financial pressure.As the tax revenue is the main part of fiscal revenue,financial pressure will eventually be passed to enterprises.The government economic decisions to deal with the financial pressure will also affect the operation of enterprises,thereby affecting the tax burden of enterprises.Financial pressure may have a two-way impact on enterprise tax burdens.The institutional environment not only influences the behavior of government,but also acts on enterprise decision.Good institutional environment,which includes high transparency of government administration and low level of corruption,can provide good protection to the market mechanism.It can reduce government intervention and correct the adverse impact of financial pressure on the enterprise tax burden.This paper attempts to explore the impact of financial pressure on the tax burden of enterprises.The research include 3 aspects:first,how does financial pressure affect the tax burden of enterprises?Second,how do different institutional environments affect the relationship between financial pressure and the tax burden of enterprises?Third,what is the main path of financial pressure affecting the tax burden of enterprises?This paper takes A-share companies listed in Shanghai and Shenzhen stock exchanges as researching sample and comes to the following conclusions.Financial pressure will reduce the enterprise tax burden because governments provide more preferential tax policies,expand the tax base,increase fiscal revenue,and reduce the tax burden of enterprises.The institutional environment will weaken the impact of financial pressure on enterprise tax burden.In addition,this paper further analyzes from the perspectives of the ownership and tax authorities.State-owned enterprises enjoy more preferential tax policies provided by the government.The role of reducing tax burden is not significant for the enterprises managed by local tax authorities.