Research On The Tax Compliance In China’s Platform Economy From The Perspective Of Incomplete Contract

Currently,the new generation of information technology,including big data,cloud computing,and blockchain,has given rise to new economic models such as the digital economy,platform economy,and sharing economy.The platform economy,a prominent example of the digital economy era’s new industry,differs from the traditional industrial economy with characteristics like business mobility,industrial integration,and virtual presence.Serving as a significant tool for improving livelihoods,streamlining daily activities,expediting the production factors cycle,and advancing industrial chain development,the platform economy plays a crucial role in stimulating economic growth.The platform economy’s continuous development has led to increasingly prominent issues such as exclusive dealing,big data-enabled price discrimination,data breaches,and winner-takes-all phenomena,which present new challenges for government governance.The conventional tax system is inadequate for accommodating the platform economy,challenging conventional means of tax collection and management,and increasing the difficulty of tax governance in this industry.The Tax Inspection Bureau has recently revealed cases of tax evasion by network anchors.In 2022,China issued the Opinions on Promoting the Standardized and Healthy Development of the Platform Economy,which emphasizes the importance of strengthening tax authority supervision over platform enterprises and taking strict action against tax evasion and other illegal practices.In this context,this paper studies the issue of tax compliance in China’s platform economy and analyze its internal mechanism using the incomplete contract theory.This paper has significant practical implications for improving tax governance,ensuring tax fairness,and maximizing the tax contribution of the platform economy.This paper aims to examine the tax compliance problem of the platform economy,following the logical line of “raising problems → theoretical analysis → current situation analysis → empirical analysis →solving problems”.The paper mainly focuses on the following five aspects: Firstly,this paper compares the domestic and foreign literature,using three dimensions: the difference between platform economy and traditional industrial economy,tax noncompliance incentives for platform economy from the perspective of incomplete contract,and the enhancement of tax compliance for platform economy from the perspective of incomplete contract.This paper provides an overview of the current state of literature,highlighting both its advancements and limitations,to serve as a foundation for future research.This section pertains to raising problems.Secondly,from the essential characteristics of the platform economy,this paper applies the theory of incomplete contract to reveal the internal mechanism of tax compliance and its competitive advantage effect in the platform economy from the three dimensions of stakeholder transaction tax contract,statutory tax contract and contract enforcement efficiency,and uses mathematical models to derive them.This part belongs to theoretical analysis.Thirdly,based on the Wind online sales database,this paper measures the tax compliance level of platform enterprises,summarizes the current situation and characteristics of tax compliance in the platform economy,and analyzes the causal factors of tax noncompliance in the platform economy of China using the theory of incomplete contract.This section is the analysis of the current situation.Fourthly,this paper examines the tax compliance of platform enterprises from the perspective of incomplete stakeholder transaction tax contract and incomplete statutory tax contract,and examines the impact of tax compliance on the competitive advantage of platform companies by considering the efficiency of contract enforcement.The econometric methods such as two-way fixed effects model,difference-in-differences model,panel threshold model,and moderating effects model are used to analyze the tax compliance of platform enterprises as well as their effects and influence mechanism.This section falls under the category of empirical analysis.Fifth,the paper puts forward corresponding policy recommendations based on the empirical results in the previous section.This is the part of solving problems.This paper’s key findings are as follows.Firstly,the findings of this paper on the measurement of tax compliance of platform firms are as follows.(1)Overall,tax compliance of platform enterprises exhibited instability after 2014.The platform economy entered an intensified competitive phase in 2015,as platform companies resorted to tax non-compliance to boost their profits and capture greater market share.Subsequently,in order to ensure the smooth development of the platform economy,China has introduced a number of initiatives and severe penalties for malpractices,which affects the behavioral choices of tax compliance or non-compliance,resulting in a state of unstable tax compliance.(2)Regionally,tax compliance of platform companies varies between regions.The platform economy’s mobility effect,unhindered by geographic distance,permits platform companies to amass revenues from all areas,resulting in uneven regional development of the platform economy.This leads to a faster development of platform economy in the eastern region and consequently a stronger incentive for tax noncompliance.Secondly,the findings of this paper on tax compliance of platform companies from the perspective of incomplete stakeholder transactions tax contract are as follows.(1)Platformization and tax compliance are positively correlated.(2)Platformization improves the level of corporate governance,eases the path of financing constraints,increases the degree of completeness of the stakeholder transaction tax contract,ensures the normal fulfillment of the stakeholder transaction tax contract,and incentivizes tax compliance.(3)Executive academic background compensates for the incompleteness of stakeholders’ transactional tax contract and further strengthens the incentives of platforming for tax compliance.(4)Media monitoring promotes self-fulfillment of the contract through the reputational mechanism and constrains tax noncompliance.(5)Platformization has a greater impact on tax compliance for companies with stronger management incentives,stateowned companies,companies with low tax incentives,and companies located in regions with lower economic development.This significantly incentivizes compliance with taxes.Thirdly,the findings of this paper on tax compliance of platform companies from the perspective of incomplete statutory tax contract are as follows.(1)The Electronic Commerce Law serves as a document to address incomplete statutory tax compacts and functions as a third-party governance mechanism to enhance tax compliance.(2)The Electronic Commerce Law reduces information asymmetry between the taxpayers and tax authorities,as well as the transaction cost of tax authorities monitoring tax contract.As a result,it alleviates incomplete statutory tax contract,which can cause contract efficiency loss.Overall,this improves tax compliance.(3)The implementation of the E-commerce Law has limited incentive effects on the tax compliance of platform enterprises due to factors such as contractual environment,social responsibility,financing constraints,and market competition levels.Fourthly,the findings of this paper on the competitive advantage effect of tax compliance for platform companies from the perspective of contract enforcement efficiency are as follows.(1)Tax compliance for platform companies creates a competitive advantage effects.(2)The competitive advantage gained through platform enterprises’ tax compliance is impacted by contract enforcement efficiency.This effect is more evident in regions with higher efficiency in enforcing contract and displays a non-linear marginal incremental characteristic.(3)Tax compliance generates a more pronounced competitive advantage effect for firms in areas with high tax collection efforts,low information transparency,small-scale firms,and western regions.Based on the findings of this paper,we propose the following four countermeasures.Firstly,implement comprehensive internal governance and external governance for tax contract with incomplete stakeholder transactions.Secondly,enhance the level of completeness of the statutory tax contract for the platform economy.Thirdly,nurture the reputation and trust mechanism to execute statutory tax contract for the platform economy while optimizing the self-fulfillment mechanism.Fourthly,improve the business environment and judicial system of the platform economy,and thereby improve the efficiency of contract enforcement.The innovation of this paper is mainly reflected in the following three aspects.(1)This paper innovates the research perspective.This paper addresses the microlevel with its analysis of the current status of platform enterprises’ tax compliance.This paper summarizes the characteristics of tax compliance in the platform economy,explains the causes of tax noncompliance from the perspective of incomplete contract,and empirically examines the issue of tax compliance and its effects on platform enterprises.(2)This paper provides innovative research content.This paper systematically examines the internal mechanisms of tax compliance and its implications for platform enterprises in three dimensions: incomplete stakeholder transaction tax contract,incomplete statutory tax contract,and contract implementation efficiency,and establishes a systematic analysis framework.(3)This paper is an innovation in the application of research methods.This paper extends several mathematical models,introduces new factors,and verifies the endogenous mechanism of tax compliance in platform enterprises and its effects.Using novel data such as Python crawling data and Wind online sales database,this paper employs the two-way fixed effect model,moderating effect model,difference-in-differences model,and panel threshold model to examine the role path of platform enterprise tax compliance and its effects.