| 简介： | 摘要：How significantly, and through what mechanisms, can taxation be constrained by weak tax enforcement? This paper uses the abolition of agricultural tax in 2005 across China as a natural ‘Fiscal squeeze’ experiment in which the revenue loss of county governments can be largely and quickly offset by tougher tax enforcement. With a focus on the VAT payment by formal firms, this paper claims a novel finding that VAT enforcement is predominantly made by raising the effective VAT rate, rather than by cracking down on the under-reporting of tax base. The incentive for VAT enforcement can be weakened, however, if the county: (1) receives a lower proportion of total VAT revenues after sharing with prefectural and provincial governments; (2) has a broader VAT tax base; or, (3) has more abundant sources of revenue from land sales. |