TITLE:
The Impact of Economic Growth and Tax Reform on Tax Revenue and Structure: Evidence from China Experience
AUTHORS:
Kanghua Zeng, Shan Li, Qian Li
KEYWORDS:
Economic Growth; Tax Reform; Total Tax Revenue and Structure
JOURNAL NAME:
Modern Economy,
Vol.4 No.12,
December
27,
2013
ABSTRACT: This paper aims to study the mechanism of how economic growth and
tax reform affect total tax revenue and structure over the period (1950-2011).
On the basis of the introduction of China’s previous main measures in tax
reform, this paper uses methods as descriptive statistics, multi-segment linear
regression model and principal component analysis to analyze how economic
growth and tax reform affect the total tax revenue and structure mainly from
three aspects as the total amount of the tax, the value-added tax and the
corporate income tax, which are under the background of tax reform. The
empirical results show that economic growth not only has a significant impact
on the total tax revenue and structure changes, but also has a long-term
stability relationship with total tax revenue. And in a long term, there is no
extraordinary growth of tax revenue. In addition, every tax reform shows a
clear impact on the tax structure, while the impact of changes in the total tax
revenue is diminishing over time.