Research On The Impact Of Tax Burden On Fixed Asset Investment Of Enterprises

In order to stimulate market vitality and promote high-quality economic development,China has implemented a series of tax and fee reduction policies,hoping to improve investment levels and boost the macroeconomy by reducing the burden on enterprises.Since the proposal of the "structural tax reduction" policy in 2008 to the successive introduction of the "institutional tax reduction" policy in recent years,China’s macro tax burden has indeed declined.However,as an important driving force for the development of China’s real economy,the growth rate of fixed asset investment has shown a downward trend under the influence of the macroeconomic downturn.Taxation is an important policy tool for the Chinese government to regulate and control the macroeconomy,and its influence mechanism on micro-subjects and the incentive effect of enterprise fixed asset investment need further research and analysis.This can not only adjust fiscal and taxation policies in a timely manner by evaluating the effectiveness of tax reductions,improve the efficiency of government governance,but also help optimize China’s industrial structure and promote high-quality economic development.Based on the study of the literature related to tax burden and enterprise investment,this paper conducts in-depth analysis from three aspects: theory,current situation and empirical aspects.In terms of theoretical research,this paper first clarifies the essence of tax burden and enterprise fixed asset investment,and then analyzes the impact mechanism of tax burden on enterprise fixed asset investment based on theoretical basis,that is,the reduction of tax burden promotes enterprises to invest in fixed assets by reducing financing constraints.In terms of the analysis of the current situation,first,China currently implements a tax system based on indirect taxes,and value-added tax is the main tax burden borne by Chinese enterprises.Second,the small-caliber macro tax burden gradually declined after the business tax reform in 2012,and the two medium-caliber macro tax burdens decreased significantly after 2015 and 2018 respectively,and the tax reduction policy achieved remarkable results.Third,the scale of fixed asset investment in China continues to expand,and the growth rate of investment first declines and then turns to an increase and stabilizes at 5% in 2020.In terms of empirical research,this paper uses the financial data of Shanghai and Shenzhen A-share listed companies from 2012 to 2021,and empirically analyzes the impact of tax burden on fixed asset investment through a fixed-effect model.First,the overall tax burden level is significantly negatively correlated with the fixed asset investment of enterprises,that is,the reduction of the tax burden will promote the investment of fixed assets by enterprises.Second,the incentive effect of tax cuts will be transmitted to the level of fixed asset investment by reducing financing constraints.Empirical results show that when a company’s tax burden is reduced,it will ease its financing constraints,thereby increasing fixed asset investment.Thirdly,this paper analyzes the heterogeneity of the region,ownership nature and fiscal pressure of enterprises in the region,and finds that compared with the central region,the incentive effect of fixed asset investment in the eastern and western regions is more significant.Compared with state-owned enterprises,the incentive effect of fixed asset investment of non-state-owned enterprises is more significant due to tax burden;Compared with enterprises with high fiscal pressure in their regions,the incentive effect of tax burden on fixed asset investment of enterprises with low fiscal pressure in their regions is more significant.Finally,based on the current status of China’s tax burden and fixed asset investment,tax reduction mechanism and empirical results,relevant policy suggestions are put forward to promote enterprise fixed asset investment from the perspective of taxation.First,increase the depth and breadth of tax reduction policies;The second is to implement differentiated tax reduction policies,appropriately tilted towards nonstate-owned and central region enterprises;The third is to ease local financial pressure.