Soft tax administration and company investment

Jiawei Zhang, Yiying Wang, Dangdang Cui and Gongjin Hu

Applied Economics Letters, 2023, vol. 30, issue 10, 1347-1352

Abstract: How can investment be stimulated under the premise of stable taxation? Based on some Chinese listed companies, we examine the impact of soft taxation on corporate investment. Companies that obtain an A tax credit rating have more actual investment now and in the future under soft tax administration, and this policy also effectively mitigates companies’ underinvestment problem. This paper shows that incentive tax policies can achieve a win–win situation between national tax revenues and company investment expenditures.

Date: 2023
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DOI: 10.1080/13504851.2022.2053051

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