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Tax Burden of Enterprises and Inequality Thereof

【Authors】
NI Hongfu, WU Yanbing & ZHOU Qianling
【WorkUnit】
NI Hongfu (Chinese Academy of Social Sciences, University of Chinese Academy of Social Sciences, 100836)WU Yanbing (Chinese Academy of Social Sciences, 100836)ZHOU Qianling (Peking University, 100871)
【Abstract】

This paper defines enterprise tax burden rate from the perspective of the new value bearing tax capacity created by enterprises, and creatively extends the use of the measurement method of income inequality to cover the measurement of enterprise tax burden inequality, and then explains the paradox of “low tax burden on the whole but high tax burden for individual enterprises” from the new perspective of tax inequality. Based on data from the national tax survey between 2007 and 2011, this empirical study finds: (1) The overall tax burden rate of Chinese enterprises increased from 18.67% in 2007 to 21.90% in 2011, still lower than the rate of OECD and other developed countries. (2) The tax burden rate of Chinese enterprises differ greatly by industry, region and ownership. Industry-wise, enterprises in the tobacco industry and petroleum processing and coking industry have the heaviest tax burden, while the agricultural sector has the lowest; regionally, the more developed eastern region has lower enterprise tax burden rates, while the less developed central and western regions have higher rates; from the perspective of ownership, state-owned enterprises have the highest tax burden rates, while foreign and Hong Kong, Macao and Taiwan-invested enterprises have the lowest. (3) There is a clear imbalance in enterprise tax burden in China and it is more serious in better developed regions. Finally, this paper points out that to tackle such inequality is one of the important tasks in the supply-side structural reform, especially the efforts to cut costs and to reduce taxes and fees.

JEL:H22, H23, H32

【KeyWords】
Tax Burden Rate, Overall Tax Burden, Enterprise Tax Inequality, Gini Coefficient