337 
405Following decades of high-speed growth, the Chinese economy has entered a “new normal” characterized by a deceleration of growth. Concurrently, the government has implemented large-scale “tax and fee reduction” policies to stimulate the real economy. While these policies are effective in reducing the burden on market entities, they have created substantial tax revenue growth pressure. Does this pressure incentivize tax authorities to enhance regulatory precision, optimize services, and promote corporate tax compliance? This paper addresses this gap by providing a micro-level empirical analysis of how tax authorities respond to tax revenue growth pressure and the subsequent impact on corporate tax compliance behavior.
This paper finds that tax revenue growth pressure significantly increases the amount of corporate tax repayments, primarily driven by penalty-based tax repayments. In the high growth pressure group, the governance effect is more pronounced for both penalty-based and self-inspection tax repayments. The compliance effect is stronger in regions with a higher level of tax administrative penalties and greater collection effectiveness, confirming the role of deterrence. Tax pressure also acts as a forcing mechanism for local tax bureaus to improve service quality in weaker areas. Furthermore, digitalization empowers tax authorities to shift from an ex-post punishment governance mode to an ex-ante prevention governance mode.
This paper proposes a three-pronged policy strategy, including enforcing precision differentiated regulation, building a preventive service system, and setting scientific budgeting and performance evaluation goals. The significance of this paper lies in its ability to disentangle the complex behavioral responses of tax authorities under tax revenue growth pressure. It moves beyond the simple “deterrence vs. service” dichotomy, and investigates whether fiscal pressure acts as a catalyst for modernizing tax administration. Understanding this dynamic is crucial for designing tax systems that balance revenue adequacy with taxpayer rights and compliance costs.
