Study On The Influence Of Cigarette Excise Tax On Local Government’s Financial Resources

The tax-sharing reform of 1994 clarified the tax authority of all levels of government and further concentrated financial power in the central government.Under the background of tax and fee reduction,the replacement of business tax with valueadded tax in 2016 has resulted in the absence of major types of local taxes.The COVID-19 epidemic has aggravated the financial difficulties of some local governments,resulting in the embarrassing situation that local governments’ fiscal revenue does not meet their fiscal expenditure responsibilities and over-rely on transfer payments from the central government.Consumption tax as the third largest tax,its income scale is relatively stable,and has a certain system basis,so it has a unique advantage in improving the choice of local tax system.In the "Several Opinions on Promoting the Reform of the Consumption Tax System",from the perspective of consumption tax reform,it is proposed to "steadily push the consumption tax collection link backward and steadily cut down the local areas".According to the guideline,there are still many inadequacies in the current consumption tax collection process,and the authorities of the central and local consumption taxes should be reasonably divided.This is in line with the General Plan for deepening the reform of the fiscal and tax systems,which states that "we should steadily advance the reform of the consumption tax system and transfer the consumption tax on some consumer goods from the place of production to the place of sale or consumption." As for the expression of "gradually delimiting local areas",the "overall Plan for deepening the reform of the fiscal and tax system" mentioned that the consumption tax of some consumer goods should be actively studied and moved to the wholesale or retail link.Through sorting out the relevant literature,we found that the dispute about the issue of consumption tax is also mainly around the collection link and income belonging to two aspects expand.Therefore,whether from the policy direction of our country,or from the actual need,it is of great significance to study the link of consumption tax collection backward and down.At the national level,although the direction of reform has been indicated in relevant policies,no concrete implementation plan has been proposed.In this study,cigarette,the consumption tax item with the greatest contribution of consumption tax,is selected as the research object.Starting from the function of consumption tax,combining the principle of production and consumption,the theory of fiscal decentralization and the theory of tax division,the necessity and feasibility of the backward movement of the collection link are discussed.Under the guidance of the above mechanism,this study selects the data from 2014 to 2020,uses the Theil index to measure the balance effect of the delay of cigarette consumption tax collection on the financial resources among local governments,and further explores the best sharing scheme.On this basis,it simulated the supplementary degree of the local government’s financial gap under cigarette consumption tax revenue,and draws the following conclusions: First of all,the data show that the reduction of cigarette consumption tax revenue alleviates the overall fiscal revenue imbalance to some extent,and under the principle of consumption place,cigarette consumption tax has a better effect on financial balance among local governments,promoting regional financial balance,especially for the central and western regions.Secondly,the cigarette excise tax revenue completely to the local is the best scheme;Finally,the local cigarette consumption tax can reduce the financial pressure of local governments to a certain extent,reduce the financial gap,and bring joint revenue.