Research On Tax Contribution And Regional Differences Of Foreign Direct Investment In China

Since the reform and opening-up in 1978,the degree of China's marketization and openness of Chinese market has continuously improved,and the scale of foreign direct investment(FDI)absorption has maintained a high-speed growth.The inflow of FDI affects China's total economic output,tax revenue,employment,industrial structure,import and export,technological progress and many other aspects.In terms of the contribution of the inflow of FDI to tax revenue,it comes from many aspects.The inflow of FDI promotes the growth of tax revenue in China through the payment of foreign tax.Meanwhile,FDI indirectly promotes tax revenue by influencing China's economy,industrial upgrading,employment,etc.However,the implementation of many preferential tax policies erodes Chinese tax revenue to some extent;even the direct contribution of FDI to tax revenue is negative.In order to evaluate the contribution of FDI to China's tax revenue in the past 40 years' reform and opening up objectively,this paper makes an in-depth analysis by combining theoretical research with empirical research,and the corresponding macro policy recommendations on the issue of low contribution of foreign capital to China's taxation are given.Based on the existing research,this paper first analyzes the current situation of China's utilization of FDI,and then analyzes the FDI,s contribution to the employment,the foreign trade and the tax revenue.Secondly,combined the relevant theoretical research with the existing relevant results,this paper use qualitative research methods,from two aspects of foreign tax and industrial structure to penetrate into the path of how FDI affect tax revenue in China.Then,based on the data of the total tax revenue,foreign-related tax revenue and the actual amount of foreign capital used in China from 1982 to 2017,I use the time series model to make an empirical analysis,and get the long-term impact of FDI on tax revenue in China.The results show that FDI and foreign tax has a long-term dynamic equilibrium relationship with the total tax revenue,and the impact of foreign tax on the total tax revenue is negative.In order to explore the impact of foreign tax and FDI on the total tax revenue further,this paper analyzed the regional effect of the impact of foreign tax and FDI on the total tax revenue based on the panel data of eastern,central and western regions of China from 1993 to 2017.The results show that both foreign tax and FDI have significant promoting effects on tax revenue,but there are differences among different regions.Finally,according to the results of above analysis,the corresponding conclusions and suggestions are given in the end of this paper.