How Does the Tax Collection Efficiency in China?

Abstract

Based on the technique of stochastic frontier analysis and China’s provincial panel data from 1997 to 2005, this paper studies tax collection efficiency and the factors affecting it. The empirical analysis shows that: From 1997 to 2005, the efficiency of tax collection increased in different regions, the average efficiency of sample regions increased from 0.482 to 0.672, and the aggregate level of efficiency was still not high, which showed that there was great potential room to improve tax collection efficiency in China. Although there was large gap among different regions, the statistics showed that the efficiency of tax collection and management underwent narrowing tendency. The increase of the proportion of female staff can improve the efficiency of tax collection and management; the person whose age is between 36 and 45 years old had a higher efficiency; the level of economic development gave positive effects on tax collection efficiency. However, its effect was relatively weak; appropriately reducing the number of tax staff can improve the efficiency of tax collection and management.