Research On The Influence Of VAT Tax Credit Refund On Enterprise Debt Financing Abilities

Optimizing the value-added tax system is an important part of constructing tax system.The VAT tax credit refund is an important tax reduction policy,which focuses on the VAT refund chains and reduces the cost of enterprises.As a major component of the economy,enterprises cannot develop without financing.At present,debt financing is still the first choice for external financing.Debt financing includes commercial credit,financial leasing,bank loans and corporate bonds and so on,among which bank loans are the main ones.The VAT tax credit refund directly impact current cashflow of enterprises.At the same time,the VAT tax credit refund indicates the government’s support for enterprises and sends a positive signal to investors,easing the financing constraints of enterprises and thus enhancing the debt financing capacity.Based on the above analysis,this paper used Chinese A-share listed companies’ data from the third quarter of 2016 to the third quarter of2019 and the differences-in-differences method is used to explore the impact of the VAT tax credit refund on the debt financing ability.The empirical study found that the VAT tax credit refund significantly enhanced the debt financing ability of enterprises;the mechanism analysis found that,the cashflow was significantly enhanced,which promoted enterprises to choose debt financing to invest.On the other hand,pilot enterprises with higher financing constraints were more significantly affected by the policy.The heterogeneity analysis found that the VAT tax credit refund had a more significant effect on the nonstate-owned and smaller enterprises.and this paper further found that the policy significantly improve the business credit capacity and alleviate the phenomenon of short term debt for long term investment.Based on the theoretical analysis and empirical tests,the following suggestions are put forward in this paper: Firstly,gradually broaden the scope of policy preferences.Secondly,shorten the length of the VAT tax credit refund Thirdly,the policy should be given to non-state-owned enterprises and small,medium and micro enterprises.Finally,prevent tax fraud and improve the VAT tax credit refund system.