Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026)

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The Unintended Consequence: The Shift from Environmental Fees to Taxes and Corporate Tax Compliance

Authors
Xin-Ying Ren1, *
1Longshan Honor College, Shandong University of Finance and Economics, Jinan, Shandong, China
*Corresponding author. Email: daphne_1001@qq.com
Corresponding Author
Xin-Ying Ren
Available Online 2 June 2026.
DOI
10.2991/978-94-6239-699-9_27How to use a DOI?
Keywords
Environmental Protection Tax; Tax Compliance; Green Economy
Abstract

This study investigates the unintended consequences of China’s reform shifting from environmental pollution fees to an environmental protection tax. Utilizing a difference-in-differences model with A-share listed companies as a quasi-natural experiment, we analyze the policy’s impact on corporate tax compliance. The results indicate that the reform significantly reduces tax compliance among heavily polluting firms. Mechanism analysis reveals that increased regulatory pressure and internal cost burdens drive firms to adopt avoidance strategies, specifically through related-party transactions and strategic inter-provincial relocation to regions with lower tax rates. Heterogeneity analysis shows these negative effects are more pronounced in firms with high pollution intensity, regions with strict environmental regulations, and areas with weak tax enforcement. These findings highlight the risk of strategic avoidance undermining fiscal order and suggest the need for enhanced inter-departmental coordination, unified national tax standards, and optimized incentives to balance environmental governance with tax compliance.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026)
Series
Advances in Economics, Business and Management Research
Publication Date
2 June 2026
ISBN
978-94-6239-699-9
ISSN
2352-5428
DOI
10.2991/978-94-6239-699-9_27How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Xin-Ying Ren
PY  - 2026
DA  - 2026/06/02
TI  - The Unintended Consequence: The Shift from Environmental Fees to Taxes and Corporate Tax Compliance
BT  - Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026)
PB  - Atlantis Press
SP  - 243
EP  - 252
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-699-9_27
DO  - 10.2991/978-94-6239-699-9_27
ID  - Ren2026
ER  -