Study On The Influence Effect Of Foreign Direct Investment On Tax Revenue

As a kind of capital containing knowledge,technology and capital,foreign direct investment is an important way for China to conduct economic and trade exchanges with the world in the process of opening to the outside world.Foreign direct investment promotes China’s reform and opening up,and plays an important role in the rapid growth of China’s economy.Due to its own characteristics,foreign direct investment has exerted varying degrees of influence on China’s tax revenue.At the same time,due to the existence of a large number of preferential tax policies for foreign investment before the merger of the two taxes in 2008,To some extent,the impact of FDI on tax revenue is limited and varies among different regions.For further research on the analysis of the effect of foreign direct investment to the tax revenue effect,this paper,taking jiangsu province as the research object,using the method of combining normative analysis and empirical analysis,analysis of foreign direct investment to local different effect from three main tax and foreign direct investment to the tax revenue in jiangsu province in three major areas of difference effect.On the basis of the existing research,this paper firstly defines the basic concepts of foreign direct investment and tax revenue by using the relevant theoretical basis and the qualitative analysis method.Starting with the two-way influence effect of foreign direct investment on tax revenue,this paper deeply analyzes the action path of foreign direct investment on tax revenue.Secondly,the utilization of foreign direct investment and tax revenue growth in Jiangsu Province and the status of regional economic development in Jiangsu Province are analyzed.Then,by introducing domestic investment variables and using the data of foreign direct investment,domestic investment and local tax categories from 1995 to 2018 as research samples,empirical analysis is made with time series data,and the short-term and long-term effects of foreign direct investment on the income of the three main tax categories in Jiangsu Province are obtained.In order to further explore the regional differences in the impact of foreign direct investment on tax revenue,and whether the merger of the two taxes in 2008 will improve the impact of foreign direct investment on tax revenue,based on the data from 1999 to 2018,the panel data analysis of the three regions in Jiangsu Province was conducted.The empirical results show that,firstly,foreign direct investment significantly increases the overall local tax revenue;Second,the effect of foreign direct investment on local overall tax revenue is lower than that of domestic investment on local overall tax revenue.Thirdly,the influence effect of foreign direct investment on the overall local tax revenue is different in different regions.Fourthly,the reform of the merger of the two taxes has improved the influence effect of foreign direct investment on the overall local tax revenue.Fifth,there are differences in the positive effects of foreign direct investment on the three main local tax categories.Finally,according to the results of the analysis,relevant policy suggestions are given.First,optimize the business environment internally and futher expand the opening-up to the outside world;Secondly,tax preferential policies should be carefully used to promote fair competition between domestic and foreign investment.;Third,deepen the adjustment of industrial structure and coordinate balanced development among regions.