Analysis of China's Tax Growth
吴菡婷
2202091076
Introduction
Since the implementation of the tax reform from profit to tax in 1985, the proportion of tax in fiscal revenue has increased year by year. The comprehensive tax reform implemented in 1994 brought new changes to tax revenue. Taxation organizing fiscal revenues, regulating economic operations, and supervising the performance of economic activities have become issues of great concern to the state
Entering the 21st century, China's economic development is facing great opportunities and challenges. In the context of the new economy, the industries based on knowledge and information are developing rapidly, the global integration of development is deepening, and China has successfully joined the WTO. The economic development under the new situation is the result of the stable and coordinated economic growth. As the tax revenue has the function of gathering wealth and regulating, it will play a very important role in the process of realizing economic development. It is of great significance to study the influencing factors of tax revenue for our country.
1. Theoretical review
Analysis of the situation
China's socialist market economic system is not perfect, all aspects of operation still need the government to carry out certain macro functions, the effective implementation of functions benefit from sufficient financial power, in which the tax takes a large proportion.
(1). Economic growth is still the main determinant of high growth of tax revenue, and there is a positive linear correlation between tax revenue and economic growth. In addition, China's tax revenue growth has greater inertia.
(2) China's tax revenue growth rate is slightly slower than the economic growth rate, tax reform is imperative. In addition, tax revenue is the main source of China's fiscal revenue, tax revenue has increased substantially, through the use of fiscal expenditure policies, a strong support for the development of economic and social undertakings.
2. Empirical analysis
(1) Variable selection
In order to fully reflect the overall picture of China's tax revenue growth, the "various tax revenue" (referred to as "tax revenue") in the "national fiscal revenue" including central and local taxes is selected as the explained variable to reflect the growth of national tax revenue. Select "real GDP" as a proxy for the level of economic growth; Select central and local "fiscal expenditure" as the representative of public financial demand; Select "Commodity Retail Price Index" as the representative of the price level.
Y——Total taxes（100 million yuan）
X1——real GDP（100 million yuan）
X2——General Public Budget Expenditure（100 million yuan）
X3——Retail Price Index（%）
(2) Data acquisition
The following data are from “China Statistical Yearbook 2020”, and the unit is 100 million yuan.
| Year | Y | X1 | X2 | X3 |
| 1994 | 5126.88 | 30321.5 | 5792.62 | 121.7 |
| 1995 | 6038.04 | 33642.9 | 6823.72 | 114.8 |
| 1996 | 6909.82 | 36981.2 | 7937.55 | 106.1 |
| 1997 | 8234.04 | 40397.0 | 9233.56 | 100.8 |
| 1998 | 9262.80 | 43566.6 | 10798.18 | 97.4 |
| 1999 | 10682.58 | 46904.5 | 13187.67 | 97.0 |
| 2000 | 12581.51 | 100280.1 | 15886.50 | 98.5 |
| 2001 | 15301.38 | 108639.2 | 18902.58 | 99.2 |
| 2002 | 17636.45 | 118561.9 | 22053.15 | 98.7 |
| 2003 | 20017.31 | 130463.2 | 24649.95 | 99.9 |
| 2004 | 24165.68 | 143657.8 | 28486.89 | 102.8 |
| 2005 | 28778.54 | 187318.9 | 33930.28 | 100.8 |
| 2006 | 34804.35 | 211147.7 | 40422.73 | 101.0 |
| 2007 | 45621.97 | 241195.8 | 49781.35 | 103.8 |
| 2008 | 54223.79 | 264472.8 | 62592.66 | 105.9 |
| 2009 | 59521.59 | 289329.9 | 76299.93 | 98.8 |
| 2010 | 73210.79 | 412119.3 | 89874.16 | 103.1 |
| 2011 | 89738.39 | 451480.1 | 109247.79 | 104.9 |
| 2012 | 100614.28 | 486983.3 | 125952.97 | 102.0 |
| 2013 | 110530.70 | 524803.1 | 140212.10 | 101.4 |
| 2014 | 119175.31 | 563773.8 | 151785.56 | 101.0 |
| 2015 | 124922.20 | 688858.2 | 175877.77 | 100.1 |
| 2016 | 130360.73 | 736036.5 | 187755.21 | 100.7 |
| 2017 | 144369.87 | 787170.4 | 203085.49 | 101.1 |
| 2018 | 156402.86 | 840302.6 | 220904.13 | 101.9 |
| 2019 | 158000.46 | 891646.1 | 238858.37 | 102.0 |
Table 1. Statistics on relevant factors of my country's tax revenue from 1994 to 2019.
(3) Model establishment and construction
Enter the data in eviews software and observe the scatter plot between Y and the three explanatory variables X1, X2, X3, as shown in the figure.
There is a strong linear relationship between X1, X2, X3 and Y in the scatter diagram, so a linear model is chosen to be established.
Yi=β0+β1 X1+β2 X2+β3X3+μ
Use eviews software to perform ordinary least squares regression on the data, and get the result as shown in the figure.
Y=402.0483+0.062132X1+0.467471X2+24.54423X3
(22339.61) (0.049808) (0.184387) (213.0059）
t= (0.017997) (1.247443) (2.535274) (0.115228)
R2=0.990741 R ̅2=0.989478 F=784.6852 n=26
3. Statistical test
(1) Goodness of fit
It can be obtained from the data in the table that R2=0.990741, and the modified determination coefficient is n, R ̅2=0.989478, which indicates that the model has a good fit to the sample.
(2) F-inspection
Regarding β1=β2=β3=0, the null hypothesis is rejected under the given significance level of α=0.05, indicating that the regression equation is significant, that is, the variables such as "real GDP", "fiscal expenditure", and "commodity retail price index" are combined Does have a significant impact on "tax revenue"
(3) t-test
The P values are 0.2254 and 0.0189.0.9093 respectively, that is, the P values of "real GDP" X1 and "retail price index of commodities" X3 are greater than the significance level of 5%, which is not significant. Accept the null hypothesis, "fiscal expenditure" X2 The P value of is less than the 5% significance level, so the null hypothesis is rejected, which has a significant impact on Y.
Therefore, for the "real GDP" X1 and the "retail price index of commodities" X3, the F test is more appropriate.
4. Measurement test
(1) multicollinearity test
I'm going to regress Y with respect to X1,X2 and X3. The regression of Y and X1 is shown in Table 3.
The regression of Y and X2 is shown in Table 4.
The regression results of Y and X3 are shown in Table 5
The regression results of Y with X1 and X2 are shown in Table 6.
The correlation coefficient of each explanatory variable was calculated, and the data of X1, X2 and X3 were selected to obtain the correlation coefficient matrix, as shown in Table 7.
Table 3, Table 4 and Table 5 shows that the combination of Y X1 X2 equation is the optimum, but Y and X3 fit of R-squared = 0.031035 is not very high, far less than Y, respectively X1, X2 regression The R-squared obtained later, but the R-squared becomes 0.990741 after the introduction of X3 from Table 2, which shows that the introduction of X3 as an explanatory variable can improve the overall model. And the correlation matrix can be seen in Table 7, the explanatory variables X1, X2, X3 correlation coefficient is not high, the model can be considered multicollinearity does not exist, it is possible to retain the original equation, i.e.
Y=402.0483+0.062132X1+0.467471X2+24.54423X3
This shows that under the circumstance that other factors remain unchanged, when the real GDP increases by 100 million yuan, for every 100 million yuan increase in fiscal expenditure, the commodity retail price index rises by 1% every time. On average, tax revenue will increase by RMB 6.2132 million, RMB 46,471,700, and RMB 2,454,423 respectively.
(2)White test
Let ei ̃ be the residual square item obtained by ordinary least squares regression of the original model, and perform auxiliary regression with X1, X2, X3 to obtain:
LM=11.43841, this value is less than the 5% significance level, the corresponding critical value x^2=19.68 of the x^2 distribution with 11 degrees of freedom, so the original price hypothesis of accepting homoscedasticity does not have heteroscedasticity.
(3) LM inspection method
In order to eliminate the influence of the common changing trend in the time series model over time, a solution to this solution is to introduce the time model trend term into the model to separate this influence. We introduce T (T=1, 2……26) in the form of square.
LM=16.05381, this value is less than the 5% significance level, the corresponding critical value x^2=26.3 of the x^2 distribution with 11 degrees of freedom, so the original price hypothesis of accepting homoscedasticity does not have no serial correlation.
5. Conclusion
These data indicate that Real GDP, fiscal expenditure and commodity retail price index really affect our tax revenue. Real GDP is positively correlated with tax revenue. This shows that real GDP will bring about an increase in taxes. This is easy to understand, because the economy is the source of input, and only by increasing output can taxes be raised, which is the fundamental reason. The impact of Finance on tax is significantly positive correlation, which shows that the increase of national fiscal expenditure, tax will also increase. The reason should be: in order to stimulate economic growth, the state often implements expansionary property policies, so that the economy can develop, and the taxes will naturally increase, thus increasing the total tax revenue. The retail price index is positively correlated with tax revenue. It is obvious that the rise of the price index means the rise of the price. The rise of the price will increase the total income of each seller, and the taxes that need to be paid will also increase, so that the tax revenue of the country will increase significantly.
Taxation, as a product of the development of social productive forces to a certain stage, will inevitably expand with the development of society. Tax is an economic activity in which the state participates in the distribution and redistribution of some social products or national income. Therefore, tax determines the healthy and stable development of the country to a certain extent. At present, China is in the transition period of economic system, and the market mechanism is not perfect. In the macro aspect, we need to make a trick to carry out active macro-control and realize the adjustment of industrial structure, And the improvement of fiscal expenditure policy. In addition, China should implement structural tax reduction, promote tax system reform, reduce tax burden by means of tax reduction, tax refund or credit, promote enterprise investment and residents' consumption, implement active fiscal policy, and promote the steady development of national economy, so as to form a positive impact on tax revenue.