Digital fiscal system and ecological environment

Zongang Liu and Yongmin Wu

International Review of Financial Analysis, 2025, vol. 105, issue C

Abstract: The digitalization of fiscal systems has revolutionized government financial management worldwide; however, its environmental implications remain underexplored. This study examines how digital fiscal infrastructure impacts the ecological environment by analyzing China's Golden Tax Phase III project—a comprehensive digital transformation initiative. We propose a theoretical framework identifying three key mechanisms through which digital fiscal systems influence ecological outcomes: enhanced monitoring of polluting activities, improved resource allocation for environmental protection via more efficient tax collection, and strengthened corporate environmental compliance. Employing a difference-in-differences approach with provincial-level panel data from 2015 to 2022, we find that the implementation of Golden Tax III significantly improved environmental conditions, as demonstrated by substantial reductions in PM2.5 concentrations. The effects are more pronounced in regions with advanced digital infrastructure and higher institutional quality. Further analysis shows that the environmental benefits arise from both improved market efficiency and strengthened government oversight. These findings indicate that digital fiscal reform can be an effective tool for ecological governance. Our results contribute to the growing literature on the spillover effects of digital transformation in public administration and offer policy insights into leveraging fiscal digitalization to promote environmental sustainability.

Keywords: Digital taxation; Golden tax phase III; Air quality; Green technological innovation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521925004806
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:105:y:2025:i:c:s1057521925004806

DOI: 10.1016/j.irfa.2025.104393

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().