Tax Administration System Reform and Corporate Tax Burden Stickiness: Empirical Evidence From the Merger of National and Local Tax Bureaus

Abstract

Based on data of Chinese A-share listed companies from 2013 to 2022, this paper tests the impact of the merger of national and local tax bureaus on corporate tax burden stickiness. The merger significantly reduces stickiness through the "tax burden reduction effect" (reducing tax collection intensity, enhancing debt tax shields) and the "governance effect" (restraining collusion, improving internal control). Effects are stronger among private firms and those with lower financing constraints. The merger reduces effective tax rates and improves performance but increases local fiscal pressure.