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Publications
  • 2024
  • Article
  • Tax Policy and the Economy

Technological Adoption and Taxation: The Case of China's Golden Tax Reform

By: Haichao Fan, Yu Liu, Nancy Qian and Jaya Y. Wen
  • Format:Electronic
  • | Pages:22
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Abstract

This paper investigates the effect of Phase 2 of the Golden Tax Project on VAT in China. The reform introduced computer-generated invoices and electronic transaction linking. Using a difference-in-differences strategy, we show that the reform increased VAT by reducing exaggerated VAT deductions. The introduction of the new digital technology had large positive effects on Chinese fiscal capacity. VAT gains from the reform explain approximately 13.7 percent of VAT growth during 1998 to 2007.

Keywords

Taxation; Governing Rules, Regulations, and Reforms; Technological Innovation; Economic Growth; China

Citation

Fan, Haichao, Yu Liu, Nancy Qian, and Jaya Y. Wen. "Technological Adoption and Taxation: The Case of China's Golden Tax Reform." Tax Policy and the Economy 38 (2024): 101–122.

About The Author

Jaya Y. Wen

Business, Government and the International Economy
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