The impact of goods and services tax increase on economic crime: Evidence from China's tobacco tax hike.

IF 2.2 4区医学 Q2 PUBLIC, ENVIRONMENTAL & OCCUPATIONAL HEALTH Tobacco Induced Diseases Pub Date : 2025-01-17 eCollection Date: 2025-01-01 DOI:10.18332/tid/197330

Xuanxuan Zhang, Zili Zhang

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Abstract

Introduction: Despite the acknowledged interconnection between socioeconomic environment and economic crime, research on the relationship between Goods and Services Tax (GST) and economic crime is scarce because of their complicated relationship. This study examines the impact of the GST increase on the illicit tobacco trade.

Methods: Based on China's tobacco excise tax shock in 2015, this study employs a difference-in-difference (DID) method to analyze the impact of the GST increase on economic crime. Panel data used in this research are collected by combining prefecture-level socioeconomic data with smuggling data from 2011 to 2016, including variables such as economic crime, wages, GDP per capita, and population. Economic crime, our core dependent variable, is evaluated by the seized-illegal value of smuggling tobacco (SIVST). In order to estimate the heterogeneity effect of tax hikes by region, we classify prefectures into three groups and add a triple interaction term into the regression model.

Results: We find that economic crime will be further elevated in places where it was initially higher, stimulated by the excise tax hike. Specifically, areas with high per capita tobacco smuggling in 2014 showed a significant increase in cigarette crime following the 2015 cigarette excise tax increase. For every 1-unit increase in per capita illicit trade in cigarettes in the region in 2014, the local illicit trade increased by 0.25 units after 2015. Heterogeneity analysis shows that the impact of GST increase on the SIVST among prefectures is more pronounced among the coastal prefectures. At the same time, there is no significant difference between border and central prefectures.

Conclusions: To mitigate the adverse effects of GST increases on economic crime, governments should implement measures to combat tobacco smuggling, particularly in regions with prevalent criminal activity. This is especially crucial when policymakers opt to raise tobacco taxes for fiscal purposes or tobacco control initiatives.

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商品和服务税上调对经济犯罪的影响：来自中国烟草税上调的证据。

导论：尽管社会经济环境与经济犯罪之间的相互联系是公认的，但由于商品服务税与经济犯罪之间的复杂关系，对两者关系的研究很少。本研究探讨了商品及服务税增加对非法烟草贸易的影响。方法：以2015年中国烟草消费税冲击为背景，采用差分法（DID）分析消费税上调对经济犯罪的影响。本研究使用的面板数据是将2011 - 2016年地级社会经济数据与走私数据相结合，包括经济犯罪、工资、人均GDP、人口等变量。经济犯罪是我们的核心因变量，以走私烟草的缉获非法价值（SIVST）来评估。为了评估地区增税的异质性效应，我们将县分为三组，并在回归模型中加入三重交互项。结果：我们发现，在消费税上调的刺激下，经济犯罪在最初较高的地方将进一步上升。具体来说，2014年人均烟草走私高的地区，在2015年卷烟消费税上调后，卷烟犯罪显著增加。2014年，该地区人均卷烟非法贸易量每增加1单位，2015年后当地非法贸易量就增加0.25单位。异质性分析表明，商品及服务税上调对县域间产业增加值的影响在沿海地区更为明显。与此同时，边境县和中部县之间没有显著差异。结论：为了减轻商品及服务税增加对经济犯罪的不利影响，各国政府应采取措施打击烟草走私，特别是在犯罪活动普遍存在的地区。当政策制定者出于财政目的或烟草控制举措而选择提高烟草税时，这一点尤为重要。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Tobacco Induced Diseases SUBSTANCE ABUSE-PUBLIC, ENVIRONMENTAL & OCCUPATIONAL HEALTH

CiteScore

5.30

自引率

5.40%

发文量

审稿时长

12 weeks

期刊介绍： Tobacco Induced Diseases encompasses all aspects of research related to the prevention and control of tobacco use at a global level. Preventing diseases attributable to tobacco is only one aspect of the journal, whose overall scope is to provide a forum for the publication of research articles that can contribute to reducing the burden of tobacco induced diseases globally. To address this epidemic we believe that there must be an avenue for the publication of research/policy activities on tobacco control initiatives that may be very important at a regional and national level. This approach provides a very important "hands on" service to the tobacco control community at a global scale - as common problems have common solutions. Hence, we see ourselves as "connectors" within this global community. The journal hence encourages the submission of articles from all medical, biological and psychosocial disciplines, ranging from medical and dental clinicians, through health professionals to basic biomedical and clinical scientists.