The Influence Of Land Finance On The Actual Tax Burden Of Listed Companies In China

Since the reform of tax sharing system,"land finance" has once become the second local finance.Land transfer income and tax revenue are the main components of local fiscal revenue.The change of one side will inevitably lead to the change of the other side.Therefore,the local government’s choice of land finance will certainly affect the decision-making and the scale of production and operation of enterprises,which are the main tax payers,and then affect the actual tax burden of enterprises.When the local government is facing the pressure from the financial gap and performance appraisal,it is urgent to increase the fiscal revenue and develop the regional economy to improve its "value".Land transfer income and tax revenue are important tools for the local government.On the one hand,China’s land related system provides advantages for local governments to acquire land.The cost for local governments to obtain land is low,but the price of land is very high,so local governments can relatively easily obtain higher income;on the other hand,land finance not only provides a new source of funds for local governments,but also alleviates the pressure of local finance to a certain extent.Especially when local governments are faced with performance appraisal from the central government and horizontal tax competition from local governments,land finance provides the best way for local governments to raise financial funds.It can also attract investment and promote economic development by transferring industrial land at a low price.The process of urbanization drives the development of regional real estate and construction industry,and then promotes the rapid growth of regional economy.Therefore,local governments have enough motivation to choose land finance rather than tax revenue to increase financial funds and develop economy.When the local government pays more attention to earning land income,and the tax revenue is only for the purpose of ensuring the completion of the plan,it will certainly affect the tax burden of the main undertaker of tax revenue-enterprises,especially the listed companies as an important source of local tax.In addition,the increase of land revenue means that the local government has more financial funds to provide tax incentives and policy support for enterprises,which will also affect the actual tax burden of listed companies.Therefore,the mode of maximizing fiscal revenue of local government can reduce the tax burden of listed companies to a certain extent.This paper aims to explore the impact of local government’s land financial behavior on the actual tax burden of the company after the reform of tax sharing system,and further explore its impact mechanism.The problems involved mainly include the following two aspects:first,what kind of impact does land finance have on the actual tax burden of the company?Second,how does land finance affect the company’s actual tax burden?Based on the financial data of prefecture level cities,land resources data and financial data of A-share listed companies from 2007 to 2017,this paper finds that the expansion of local land financial scale will reduce the company’s actual tax burden,and the main path is that the land financial revenue increases the local government’s financial funds.In order to develop the local economy and support and assist the company’s development,the local government will increase the local government’s financial funds through government subsidies.Further research shows that land finance mainly reduces the value-added tax burden of listed companies;Under the high intensity of tax collection and management,land finance has a greater negative impact on corporate tax burden.