In recent years,along with the im-plementation of tax and fee reduction policies,the issue of declining local fiscal self-sufficiency has attracted widespread social attention.This article analyzes the impact of the tax reduction policy on the local fiscal self-sufficiency rate using provincial panel data from 2009-2019.The empirical test finds that:(1)Tax reduction significantly reduces the local fiscal self-sufficiency rate.(2)Mechanism analysis shows that tax reduction reduces the local fiscal self-sufficiency rate mainly by reducing per capita fiscal revenue.Tax reduction also led to a decline in per capita fiscal expenditures,but the rigidity of fiscal expenditures makes the decline in fiscal expenditures unable to offset the decline in fiscal revenues brought about by the decline in the rate of fiscal self-sufficiency.(3)The impact of tax reduction on local fiscal self-sufficiency rates is heterogeneous across regions.(4)In order to cope with the impact of tax cuts on the fiscal self-suffi-ciency rate,local governments have increased their reliance on non-tax revenues and central transfer funds in terms of revenues,and in terms of expend-itures,they have downsized the scale and proportion of urban and rural community expenditures,while their general public service expenditures have been increasing significantly.(5)The moderating effect shows that the reduction of local fiscal expenditure responsibility can effectively mitigate the impact of tax reduction on the local fiscal self-sufficiency rate.The findings of this article provide important insights for China to improve its fiscal system and cope with the decline in local fiscal self-sufficiency caused by tax reduction.
Tax reductionFiscal self-suffi-ciency rateFiscal revenue and expenditure
NETL
NSTL
万方数据
