Tax burden and firms’ export: evidence from the World Bank’s Enterprise Survey on China
(2.School of Economics, Shandong University, Jinan, China 250100)
【Abstract】 In the context of the wave of anti-globalization, the rise of trade protectionism, and the trade friction between China and US, could China employ internal reform, such as fiscal and tax policy, to achieve the upgrading of firm export? Or rather, could tax relief provide Chinese firms a key taxation-driving force for improving export? The discussion on this issue is of great practical significance. In view of this, based on the data of the World Bank’s Enterprise Survey 2005 on China, supplemented by the World Bank’s Enterprise Survey 2012 on China, this paper made the first attempt to systematically explore the impact of tax burden on firms’ export. Our main finding is that tax burden has a negative impact on firms’ export propensity, export scale, and export intensity. Furthermore, the negative impact mainly comes from value-added tax (VAT) burden. The innovation and contribution of this paper are as follows. Firstly, this is the first paper to directly explore the impacts of different kinds of tax burden on firms’ export based on the data of the World Bank’s Enterprise Survey 2005 on China and the World Bank’s Enterprise Survey 2012 on China, which provides the micro evidence for verifying the substantial effect of tax burden on firms’ export. Secondly, this paper compares the impacts of the burden of turnover tax (indirect tax) burden and income tax (direct tax) on firms’ export, and finds that the negative impact mainly comes from turnover tax (indirect tax), which indicates that the tax structure biased toward direct tax is a better tax arrangement for export firms under the premise that the general target of taxation is determined. The Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform adopted at the Third Plenary Session of the 18th National Congress of the CPC clearly put forward: “We will deepen the reform of the taxation system, improve the local tax system, and gradually increase the proportion of direct tax.” This paper provides empirical evidence for the rationality and necessity of this reform from the perspective of stabling foreign trade. Thirdly, to get to the origins of the negative impact, this paper inquisitively explores which kind of turnover tax (indirect tax) burden has a substantial effect on firms’ export by comparing the impacts of VAT burden, business tax burden and consumption tax burden, and finally finds that VAT burden has the strongest negative impact on firms’ export, followed by business tax burden and consumption tax burden. Or rather, the negative impact of turnover tax burden on firms’ export mainly comes from VAT burden. Fourthly, this paper supplements the empirical study on firms’ export mode by comparing the impacts of tax burden on firms’ direct export and firms’ indirect export, and finds that tax burden mainly affects indirect export. Fifthly, this paper makes the first attempt to explore the channels through which tax burden affects firms’ export in detail, and thus systematically gives an answer to the question that how tax burden affects firms’ export.
【Keywords】 tax burden; export propensity; export scale; export intensity;