The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms
This paper uses a balanced panel of large manufacturing firms to study the dynamic effects of computerizing VAT invoices on tax revenues and firm behavior in China, 1998-2007. We find that computerization explains 10.8% of cumulative VAT revenues and increases the effective average tax rate by approximately 9-12% in the seven subsequent years. The evidence suggests that the effects of computerization change over time: tax revenue gains are likely to be smaller in the long run, while firm output contract monotonically over time.
Qian, Nancy. 2018. The Dynamic Effects of Computerized VAT Invoices on Chinese Manufacturing Firms.