Study On The Correlation Between Ability To Provide Basic Public Services And Tax Compliance

In recent decades, research on domestic and international tax compliance has not beenstopped and tax non-compliance (especially tax evasion) has become a worldwide problem.In China since the reform of the tax system1994, although the significant increase in taxrevenues each year, share of the GDP is growing steadily, the scale of China’s tax erosion isstill quite large. The other hand, under the influence of "dual economic structure", fiscaldecentralization system and democratization process, there are many problem on publicservice of the Chinese Government no matter in aggregate or in the efficiency. In thisconnection, I boldly assume that improvement of the ability of Chinese Government’sbasic public service will increase the taxpayers ’ tax compliance rates, thereby reducing thescale of China’s tax erosion.In order to better research, the papers based on Tax contract theory, throughcorrelation analysis and empirical analysis, verify the paper assumption, respectively. Incorrelation analysis, I establish a game between government and taxpayers vividlyelaborated the selections between the Government and the taxpayer on the basis of publicservice provision and tax issue game. In the empirical analysis, I selected9indexes,divided into four main categories such as health care, basic education, social security andthe social environment and so on, and then established the evaluation system of basicpublic service. After that, I selected the data of1990-2010to calculate the basic publicservice with SPSS statistics software. At the same time, I calculated the scale of China’s taxerosion of1990-2010through cash ratio method. In the end, made the regression analysisthe result showed the ability of government basic public service and the tax erosion ispositive correlation, which in line with expectations.