Research On Tax Reduction And Corporate Debt Financing Decision Under The Background Of De-leverage

After the 2015 Central Economic Work Conference officially proposed de-leverage,de-leverage has been continuously listed as the focus of economic work.In order to promote de-leverage smoothly,the government has successively issued tax reduction policies to reduce the tax burden of enterprises.Therefore,the paper raises research questions:Under the background of de-leverage,how does tax reduction affect corporate debt financing decisions?Does turnover tax and income tax reduction have different impacts on corporate debt financing decisions?Based on the enterprise level data this paper discusses the impact of tax reduction on the sources of corporate debt financing(bank loans,commercial credit)and leverage ratio by comparing the turnover tax and income tax,and makes a heterogeneity test according to the nature of property rights,financing constraints and newly added fixed assets.In addition,it discusses the comprehensive effect of tax reduction on corporate debt financing,and how tax reduction affects debt cost and total assets turnover rate.Based on the data of Shanghai and Shenzhen A-share listed companies from 2011 to 2018,the paper draws the following conclusions through empirical analysis:Turnover tax reduction significantly improved the commercial credit,but failed to significantly reduce the bank loan;income tax reduction significantly reduced the bank loan,but had no significant impact on the commercial credit.The influence of turnover tax and income tax reduction on the source of debt financing is heterogeneous.In addition,the leverage reduction effect of the turnover tax reduction is not significant,and the income tax reduction significantly reduces the leverage ratio of enterprises.Income tax reduction is the main tool for enterprises to deleverage and reduce their financial risks.Turnover tax reduction has little effect on de-leverage and reducing their financial risks,but it helps to optimize the relationship between upstream and downstream enterprises and improve commercial credit.The heterogeneity test of property rights,financing constraints,and newly added fixed assets shows that,firstly,the increase in commercial credit of state-owned enterprises is more sensitive to turnover tax reduction.Turnover tax reduction only significantly reduces the leverage ratio of private enterprises.The reduction in bank loans and leverage ratio of state-owned enterprise is more sensitive to income tax reduction.Secondly,the increase in the commercial credit of the high-financing constraint group is more sensitive to turnover tax cuts.The reduction of bank loans with low financing constraints is more sensitive to income tax cuts.The income tax cuts only significantly reduced commercial credit in the high financing constraint group.The reduction in the leverage ratio of the high-capital constraint group is more sensitive to income tax reduction.Finally,income tax cuts only reduce corporate bank loans in the low newly added fixed asset group,significantly reduce corporate leverage in both the low newly added fixed asset group and the high newly added fixed asset group,and the low newly added fixed asset group is more sensitive.In addition,the total tax burden reduction significantly reduced bank loans and leverage,but did not significantly increase commercial credit.Turnover tax reduction significantly increases the company’s total asset turnover,but not significantly reduces debt costs.Income tax cuts have significantly reduced debt costs,but have not significantly increased total asset turnover.Based on the above conclusions,the recommendation of the paper is that on the one hand,when formulating tax reduction policies,the government needs to consider the differential effects of turnover tax reduction and income tax reduction on corporate debt financing.In order to achieve the policy purpose of helping companies de-leverage and reduce financial risks,it is necessary to focus on income tax reform;in order to improve commercial credit financing,it is necessary to focus on turnover tax reform.The heterogeneity test shows that under the general tax reduction situation,it is necessary to cooperate with other policy tools to better achieve the de-leverage goal.On the other hand,enterprises should take the initiative to take advantage of turnover tax and income tax policy opportunities,adjust the debt financing structure,build a financing structure suitable for enterprise development,and promote the long-term and healthy development of enterprises.