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Abstract Using the enforcement of the “Golden Tax Project Phase III” (Hereinafter referred to as “GTPIII”) as a quasi-natural experiment, this paper employs the Time-varying difference-in-difference (DID) method to comprehensively assess the impact of tax collection and management digitalization on enterprises’ social security compliance, based on National Tax Survey Data from 2007 to 2016 in China. This study found that the “GTPIII” significantly improved enterprises’ actual contribution rate of social security by 6.28 % and their likelihood of participating in social security by 17.62 % on average. Similar positive effects were obtained when various kinds of social security compliance behavior were considered. The “GTPIII” achieved such facilitating effects by promoting the interconnection of tax-related information between departments, discouraging enterprises from concealing contribution bases, and discouraging local governments’ flexible collection behavior. Heterogeneity research reveals that the “GTPIII” has a greater impact on social security compliance in SMEs, non-state-owned enterprises, low average salary and low profitability enterprises. Further analysis reveals that the “GTPIII”, while significantly increasing revenue for the regional social security fund, has caused enterprises to shift the tax burden by reducing jobs and lowering employee wages, forcing them to take the initiative to increase R&D expenditures.
Chang-lin et al. (Fri,) studied this question.