How Tax Competition Affects the Non-Tax Collection:Further Explanation of the Substitution of Non-Tax for Tax
The phenomenon of arbitrary fees under the pressure of tight fiscal balance is becoming increasingly prominent,causing enterprises to reduce taxes but not their burdens,which damages the effectiveness of tax-cut policies.In recent years,it has gradually attracted attention and has been referred to as the phenomenon of substitution of non-tax for tax(hereafter SONFT for short)by scholars.How to understand the true meaning of SONFT and explain this deviation is a practical proposi-tion worth exploring.This article constructs an asymmetric response model based on panel data from 269 cities for spatial de-composition,verifying the binary characteristics of tax competition,namely the co-existence of both racing-to-the-top com-petition and racing-to-the-bottom competition motivations.These two tax competition tendency indicators are further con-structed as proxy variables for tax collection space.The regression result shows that racing-to-the-top competition tax compe-tition significantly reduces the non-tax revenue burden in the local area,while the racing-to-the-bottom competition signifi-cantly increases the non-tax revenue burden in the local area.The research in this article suggests that SONFT is not a trade-off between the burden rates of the two,but rather a situation that non-tax makes up for tax revenue.That is,when the space for tax growth is small and the pressure is high,the non-tax collection efforts will increase in a timely manner.Heterogeneity analysis shows that local fiscal pressure will exacerbate the SONFT effect,while informatization of tax administration can sig-nificantly weaken it,and transfer payments can help reduce the dependence of local governments on non-tax income.This ar-ticle explores from the perspective of tax competition how the tax collection space of local governments affects the non-tax rev-enue collection efforts.While accurately explaining the connotation of SONFT,this paper also points out the improvement di-rection for how to enhance the effect of tax-cut and practice the legality principle of tax collection in the future.
Substitution of Non-Tax for TaxTax CompetitionTax Collection SpaceNon-Tax Income
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