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The Effects of Tax Reduction and Fee Reduction Policies on the Digital Economy

Tuochen Li () and Liang Yang ()
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Tuochen Li: School of Economics and Management, Harbin Engineering University, Harbin 150001, China
Liang Yang: School of Economics and Management, Harbin Engineering University, Harbin 150001, China

Sustainability, 2021, vol. 13, issue 14, 1-20

Abstract: The digital economy is the future of the world in terms of both contemporary trends and opportunities. Developing the digital economy is a practical way of strategically re-thinking network power and digital China and is the only way to achieve successful growth in countries’ development economies and seize a commanding position for future development. Tax reductions, which promote high-quality economic development and preserve the overall situation of national governance, are an important measure for all countries to cope with economic pressure. In recent years, China has successively introduced and continuously expanded a series of tax and fee reduction policies that have played an important role in stabilizing its economy and vigorously developing its digital economy. This study consists of six sections. The first section provides an overview of the digital economy, introducing its definitions and connotations as well as the significance of developments of the digital economy. The second section is a literature review of tax and fee reductions; the research results in this field for countries around the world are summarized based on the three perspectives of research objects, tax-reduction-policy effects and research methods and data. The third section describes the impact of tax reductions and fee reductions on China’s digital economy from an international perspective. Through the 2019 Forbes Global Top 100 Digital Economy List, this article analyzes the global digital economy corporate structure, observes the positive effects of tax and fee reductions on Chinese digital economy companies and compares the impact of tax cuts and fee reductions on digital economy companies in China, the United States and other countries. Stata software was used to conduct an empirical analysis on the panel data of digital economy companies from both macro and micro perspectives and Analysis of the Effects of Tax and Fee Reduction Policies in the Digital Economy presents an evaluation of the policy effects of tax cuts and fee reductions on digital economy companies from multiple aspects. China does not have a systematic tax and fee reduction policy that is compatible with digital economy development and its investments in large digital economy companies can be increased, as discussed in Problems of Tax and Fee Reduction and Policies in China’s Digital Economy. In Policy Recommendations for Tax and Fee Reductions in the Digital Economy, we recommend that China improves and optimizes its tax and fee policies to increase tax incentives for independent innovation and high-level talent.

Keywords: digital economy; tax reduction and fee reduction policies; policy effects (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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