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Original scientific paper

https://doi.org/10.1080/1331677X.2022.2152358

Have tax reduction and fee reduction promoted the development of the financial industry?—Empirical evidence based on listed companies in the financial industry

Yang Cao
Jiaming Xie
Wei Zhang


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Abstract

Finance plays an important role in China’s new development pattern,
and the financial industry is also a crucial part of the country’s economic
growth. This paper selects the four financial index data of 76
listed companies in the financial profile of Hithink RoyalFlush stocks
and the consolidated balance sheet and consolidated income statement
in the China Stock Market Accounting Research (CSMAR) database,
empirically studies the impact of tax reduction and fee
reduction on the financial industry through the Panel Vector
Autoregression (PVAR) model, and gives relevant suggestions. The
results show that: (1) The implementation of tax reduction and fee
reduction policy makes the net profit available to the financial industry
increase in the short term, but the long-term effect is not obvious.
(2) The reduction of the tax burden will significantly increase the net
sales interest rate of the financial industry within one year, and then
the fluctuation in the impact tends to 0. (3) The reduction of the tax
burden will lead to the reduction of financial enterprises’ sense of
hardship in a certain period of time, which will lead to the reduction
of the total asset turnover rate. (4) The reduction of the tax burden
will increase the debt-to-asset ratio of financial enterprises within two
years, thus increasing financial risk. The research not only provides a
theoretical analysis and policy basis for the analysis of the impact of
tax reduction on the financial industry but also provides decision support
for tax reduction policies to revitalize industry development,
stimulate financial market activities, ensure direct access to financial
resources to enterprises, and further increase the market activities of
the whole society.

Keywords

Tax reduction and fee reduction; financial industry; panel vector autoregression (PVAR) model; tax burden

Hrčak ID:

308010

URI

https://hrcak.srce.hr/308010

Publication date:

1.9.2023.

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