Research on the Impact of Digital Economy on Local Tax Revenue—PVAR Model Analysis Based on Chinese Provincial Panel Data

Abstract

The digital economy has been clearly identified as an important means to promote China’s economic development in the 14th Five-Year Plan. While promoting regional development, it also affects local tax revenues. Based on the provincial panel data of 30 provinces from 2011 to 2020, this paper constructs an index system to measure the development of provincial digital economy through Internet penetration rate, number of Internet practitioners, Internet-related output, number of mobile Internet users and digital inclusive financial index, and explores the dynamic interaction between digital economy and tax revenue by using PVAR model. The results show that the digital economy has a long-term positive impact on regional tax revenue, but the impact of tax revenue on the digital economy is not significant. It is suggested that local governments should seize the opportunity of the development of the digital economy, conserve tax sources and increase tax revenue on the one hand, and make good use of digital information technology to accelerate the construction of tax information on the other hand.