This paper uses China's value-added tax(VAT)rate reform as a quasi-natural experiment to identify the impacts of VAT rate shocks on corporate financial leverage.The results indicate that the reform reduced corpora...This paper uses China's value-added tax(VAT)rate reform as a quasi-natural experiment to identify the impacts of VAT rate shocks on corporate financial leverage.The results indicate that the reform reduced corporate total leverage significantly.There was a decrease in short-term leverage,but long-term leverage showed no significant change.These results remained robust across a series of robustness checks.Mechanism analysis shows that increasing profitability and improving cash flows acted as intermediary channels for the reform's impact on leverage.The reform also contributed to the mitigation of the asset–liability mismatch problem and the reduction of debt risk,while having no apparent impact on corporate investments.Finally,enterprises with more elastic demand and those with lower intermediate input ratios were affected most by the deleveraging effect of the VAT rate reform.This study suggests how the VAT rate cut shaped corporate capital structure.It thus helps to explain the economic consequences of VAT rate shocks.展开更多
The level of tax burden in a country should be determined by the condition of its economy,but it also has impact on economic development.Taxation and budget reform was discussed at the 3rd Plenary Session of the 18th ...The level of tax burden in a country should be determined by the condition of its economy,but it also has impact on economic development.Taxation and budget reform was discussed at the 3rd Plenary Session of the 18th CPC Central Committee,and the new reform was introduced.Under the new thinking,budget review is no long be limited to balanced budget and the size of the deficit but will also include projected expenditure and policy.This means the change from“making tax plans“to”setting tax expected targets”.The idea of“economic determination of taxes”has left a prominent mark in the history of taxation theories in China going back thousands of years.In particular,taxation theorists have always stressed the need to protect and nurture tax sources.For example,Confucius stressed“keeping tax burdens light and allowing the people to be rich”,Mencius similarly advocated for the importance of enriching the people,Xunzi,for his part,argued for the need to levy taxes in accordance with the law,Wang Anshi believed that people can only be taxed if they are first allowed to earn an income,and Qiu Jun promoted the idea of“less taxes,more revenues”,and many others.All these ideas in the history are rich sources of reference for those trying to reform the taxation system today in China.展开更多
In recent years China’s tax authority prioritized the expectations of market entities and focused on relieving their burden,supporting their development,raising the efficiency and promoting shared governance,improved...In recent years China’s tax authority prioritized the expectations of market entities and focused on relieving their burden,supporting their development,raising the efficiency and promoting shared governance,improved the mechanism to advance work and paid special attention to the implementation of reform measures,so as to ensure timely implementation of tax and fee reduction,deliver notable reform results in key areas including legislation of taxation and facilitation of tax payments,and actively build a stable,fair,transparent and predictable tax-related business environment.展开更多
基金All authors contributed equally.The authors thank the reviewers for their valuable comments and acknowledge the generous support from the Fundamental Research Funds for the Central Universities of China.
文摘This paper uses China's value-added tax(VAT)rate reform as a quasi-natural experiment to identify the impacts of VAT rate shocks on corporate financial leverage.The results indicate that the reform reduced corporate total leverage significantly.There was a decrease in short-term leverage,but long-term leverage showed no significant change.These results remained robust across a series of robustness checks.Mechanism analysis shows that increasing profitability and improving cash flows acted as intermediary channels for the reform's impact on leverage.The reform also contributed to the mitigation of the asset–liability mismatch problem and the reduction of debt risk,while having no apparent impact on corporate investments.Finally,enterprises with more elastic demand and those with lower intermediate input ratios were affected most by the deleveraging effect of the VAT rate reform.This study suggests how the VAT rate cut shaped corporate capital structure.It thus helps to explain the economic consequences of VAT rate shocks.
文摘The level of tax burden in a country should be determined by the condition of its economy,but it also has impact on economic development.Taxation and budget reform was discussed at the 3rd Plenary Session of the 18th CPC Central Committee,and the new reform was introduced.Under the new thinking,budget review is no long be limited to balanced budget and the size of the deficit but will also include projected expenditure and policy.This means the change from“making tax plans“to”setting tax expected targets”.The idea of“economic determination of taxes”has left a prominent mark in the history of taxation theories in China going back thousands of years.In particular,taxation theorists have always stressed the need to protect and nurture tax sources.For example,Confucius stressed“keeping tax burdens light and allowing the people to be rich”,Mencius similarly advocated for the importance of enriching the people,Xunzi,for his part,argued for the need to levy taxes in accordance with the law,Wang Anshi believed that people can only be taxed if they are first allowed to earn an income,and Qiu Jun promoted the idea of“less taxes,more revenues”,and many others.All these ideas in the history are rich sources of reference for those trying to reform the taxation system today in China.
文摘In recent years China’s tax authority prioritized the expectations of market entities and focused on relieving their burden,supporting their development,raising the efficiency and promoting shared governance,improved the mechanism to advance work and paid special attention to the implementation of reform measures,so as to ensure timely implementation of tax and fee reduction,deliver notable reform results in key areas including legislation of taxation and facilitation of tax payments,and actively build a stable,fair,transparent and predictable tax-related business environment.
