Financial Development,Tax Neutrality and Enterprise Tax Burden
"The Fourteenth Five-Year Plan"states that a sound fiscal and financial system that meets the require-ments of high-quality development is needed.This paper focuses on the practice and manifestation of tax neutrality and tax stabilizers in microenterprises in order to elaborate and demonstrate the mechanisms by which financial development affects the actual tax burden of firms.Based on the endogenous economic growth model,the concepts of financial de-velopment and enterprise investment costs are introduced,and a theoretical analysis reveals that under the actual char-acteristics of the Chinese economy,with the increase in the degree of financial development,the local government ex-pands the output of enterprises by lowering the effective tax rate of the enterprises,which in turn promotes the optimi-zation of social welfare.Empirical evidence suggests that higher levels of financial development reduce the cost of cor-porate finance and encourage firms to opt for debt financing mechanisms,which contribute to lowering the cost of cor-porate investment and increasing corporate economic efficiency and profitability.It also facilitates local governments to increase tax revenues,easing fiscal pressures and further reducing the corporate tax burden,thus again contributing to the expansion of corporate output.The results of the study show that when the level of financial development is in-creased by 10 percent,the effective tax rates of corporate income tax,value added tax and overall tax burden in the re-gion will be reduced by 1.59 percent,0.76 percent and 1.02 percent,respectively.The conclusions of this paper can provide references and suggestions for growing market players,improving the government's macro-governance capaci-ty,and deepening the reform of the fiscal and financial system.
financial developmenttax neutralityenterprise tax burdeneffective tax ratefiscal and finan-cial harmonization
万方数据
维普
