Tax Revenue Target,Discretion and the Take-up of Tax Benefits
In addition to the general standardized tax system,the formulation of tax benefits for specific fields and indus-tries is the primary means of conducting macroeconomic stimulus and industrial regulation by the government.In addi-tion to the policy formulation itself,the extent to which tax benefits are taken-up is one of the keys to determining the ef-fectiveness of tax benefits.However,in many developing countries,including China,the extent to which tax benefits are taken-up is generally low.Existing studies suggest that institutional transaction costs,information friction,and behavioral economics factors such as tax compliance are the three key factors influencing the take-up of tax benefits,but they over-look the potential impact of the behavioral incentives of the tax authority.In fact,there are stringent prior checking and approval processes in tax benefits,and the tax authority has broad discretion over many aspects of tax benefits.Obvi-ously,if we overlook the role of the tax authority,the understanding of the take-up of tax benefits will hardly be complete.In order to promote collection efficiency,especially ensure timely and full collection of tax revenue,China's tax au-thority has implemented a performance evaluation system based on the completion of revenue targets for a long period.Under such a logic of action,any policy objective that conflicts with the completion of revenue targets will be disturbed.Taking tax benefits as an example,the implementation of tax benefits is formally at the expense of reducing the total tax revenue in the current period,and therefore,when the implementation of tax benefits does not constitute the main perfor-mance evaluation indicators,and the tax authority has broad discretion for tax benefits,strengthening the approval proce-dure and even hindering the reasonable take-up of tax benefits to a certain extent,so as to ensure the timely realization of the revenue target,will become the preferred strategy of the tax authority.Based on macro and micro data of China from 2008 to 2015,and taking the income tax benefits for small and micro enterprises as the main background of tax benefits,this paper examines the impact of tax revenue target on the take-up of tax benefits,and discusses the impact mechanism of discretion in detail.Empirical findings reveal that,on the one hand,the tax revenue target significantly affects the extent to which tax benefits are taken-up,especially when the revenue tar-get derives a stronger pressure on tax enforcement,the extent to which tax benefits are taken-up will be significantly re-duced;on the other hand,the limitation of discretion significantly weakens the negative effect of tax revenue target on the take-up of tax benefits,compared to the examination and approval system,the negative impact of tax revenue target on the take-up of tax benefits will decrease significantly when the filing system reform is implemented.After a series of tests,the above conclusions are robust.The contributions of this paper are threefold.Firstly,it expands and deepens research on tax revenue targets.Existing studies have primarily focused on the impact of tax revenue targets on the total tax burden,while lacking the exploration of the sources of changes in the tax burden at a more specific level.This paper takes the scope of discretion as the institu-tional basis and the take-up of tax benefits as the object of observation,which not only enriches the understanding of the specific behavior of the tax authority but also provides a more microscopic and specific perspective to understand the change of enterprise tax burden under the target-based tax administration system.Secondly,it expands research on the take-up of tax benefits.Existing studies have primarily focused on the logic of cost-benefit and information frictions from the perspective of enterprises'take-up of tax benefits,this paper examines the take-up of tax benefits from the perspective of the tax authority's behavioral incentives,and puts forward valuable policy implications based on the limitation of dis-cretion.Finally,it enhances the understanding of the implementation of policy under multi-objective.In fact,multi-objective governance is considered to be an important feature in China's primary-level governance.This paper demon-strates the stylized fact of objective conflicts among different levels of government from the taxation dimension,and fur-ther provides policy implications to promote multi-objective synergy,which provides a new perspective for understanding the central-local relationship.
Tax Revenue TargetTake-up of Tax BenefitsDiscretionCentral-Local Relationship
万方数据
维普
