A Study On Tax Compliance Costs In Hangzhou

Enterprises are the driving force to promote the development of local economic,and the local economic development and vitality are closely related to thecompetitiveness of enterprises. Hangzhou’s economic level has been maintained at theforefront of China, but an important factor of maintaining economic vitality inHangzhou is the government investment in real estate and infrastructure construction.As we all know, economic growth requires coordination among investment, exports andconsumption, the economic growth relying on government investment and real estateinvestment is unstable, it needs to stimulate exports and consumption, which requires tostrengthen the vitality and competitiveness of enterprises force, and reducing taxcompliance costs for enterprises is an important factor to improve the vitality andcompetitiveness of enterprises. Currently, real-estate investment in Hangzhou began todowngrade, so the municipal government should transform the economic developmentmode, concern about the development of enterprises, so as to reduce unnecessaryburden for enterprises, make our city enhance competitiveness in the country and evenin the world, and thus stimulate the overall development of our city’s economic health.Corporate taxes and a variety of tax-related matters and costs has become themajor burden that our city’s enterprises are facing. Since2008, in order to promote theimplementation of the major strategy "starting business to enrich people, makinginnovation to enhance province", accelerate the transformation of our province’seconomic development, reduce the burden on enterprises and the masses, and promoterapid and better economic development in Zhejiang Province, Zhejiang government hasissued a document to cancel and pause administrative entrepreneurship fees and lowerthe charging criterion of project fees for three times. Firstly, this paper measures andcalculates the factors affecting corporate tax compliance costs, and simplifies15indicators into3indicators to make a summary by SPSS factor analysis method. Basedon some domestic and foreign scholars’ research results, this paper discusses the factorsaffecting tax compliance costs. Through field research and calculations of taxcompliance costs and tax compliance income for nearly246large and small companies,this paper makes further empirical analysis on the factors affecting tax compliance costs,and finds out the reasons of our city’s high costs of tax compliance, including theII problems on tax system and policies in our city. Finally, based on the above qualitativeand quantitative research, this paper proposes to reduce the corporate tax compliancecosts in Hangzhou City, and its feasibility.