Research on the Impact of Tax Administration Digitalization Reform on the Quality of Government Audit: Empirical Evidence from the Golden Tax III Project

Digital Conversion is an essential step towards tax administration reform, as it expands the methods of tax administration and enhances its efficiency. This text probes into the influence of tax governance digitalization reform on the quality of government audits, using the Golden Tax III Project in an almost natural setting. A double difference pattern is constructed for this purpose. The digitization reform of tax governance has been found to enhance the quality of government audit by increasing the diaphaneity of government fiscal message and tax revenues. However, the impact of this reform on the quality of government audit varies across provinces due to their different geographic locations. This paper proposes three suggestions. Firstly, enhance the execution endeavors of Golden Tax IV based on the Golden Tax III project. Secondly, use different policy measures for tax digitization reforms in provinces with varying geographic locations. Thirdly, improve tax legal system to increase the transparency of government financial information and tax revenues.