An Empirical Study on China’s Regional Tax Revenue Performance

Shang, Jiang (2016) An Empirical Study on China’s Regional Tax Revenue Performance. PhD thesis, University of Gloucestershire.

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Abstract

This research aims to find the key determinants of the variation of the tax revenue capacity in China, and to evaluate China’s tax revenue performance at provincial level. The econometric quantitative method is applied in this study for these purposes. The data used in this study covers the period between 1995 and 2013 on 31 provinces, autonomous or municipal cities directly under the control of the Central Government. Differing from the previous research, a new dependent variable, the current revenue ratio is used in addition to the conventional tax ratio. The current revenue is the sum of tax revenue and non-tax soured revenue excludes State Owned Enterprises revenues and expenditures. Eleven independent variables falling into six categories were selected. These six categories were: The traditional tax handles, GDP decomposition, Population factors, Income inequality, Governmental factors, and Corruption. The contributions of this study are: Firstly, for the first time the author constructed the current revenue ratio as the second dependent variable to represent the broader fiscal revenue and true tax-like revenue performance for studying tax effort index in China. Secondly, this study constructed the rural-urban income disparity Theil index as one of the explanatory variables in the tax effort index models for the first time in China’s tax performance study. Thirdly, for the first time in the tax effort index literature, this study used country specific data on corruption in a single country tax effort index model. The main results of this study are: 1) tax revenue capacity is mainly determined by the economic factors whereas the current revenue capacity is determined by both the economic and social factors; 2) tax revenue performance is diluted by the existence of non-tax sourced revenues; 3) the current revenue ratio is a better indicator for true tax performance; 4) There exists a regional disparity of tax or current revenue capacity among provinces. 5) tax/current revenue capacities and tax/current revenue efforts are mismatched in some provinces.

Item Type: Thesis (PhD)
Thesis Advisors:
Thesis AdvisorEmailURL
Hu, Xiaolingxhu@glos.ac.ukUNSPECIFIED
Uncontrolled Keywords: Tax revenue capacity; China; Rural-urban comparison
Subjects: H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation. Internal revenue
Divisions: Schools and Research Institutes > Business School > Accounting and Finance
Depositing User: Susan Turner
Date Deposited: 26 Jul 2017 13:34
Last Modified: 26 Jul 2017 13:34
URI: http://eprints.glos.ac.uk/id/eprint/4807

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