Ambivalent tax morale-building in China

Abstract

This article examines the measures taken in China over the past four decades that aim to encourage taxpayer compliance through building a tax morale that is premised on fairness, equity and reciprocity between the government and citizens. The state’s contradictions and conflicting aspirations in tax governance are characterised as a process resulting in an ambivalent tax morale. The Communist Party of China’s goals of maintaining both Party legitimacy and monopoly as well as the lack of state capacity have resulted in the ambivalence. Building a tax morale thus has contradictory outcomes. The building of an ambivalent tax morale explains the limited effects of tax governance in China. While such ambivalence allows the state to collect tax revenue to maintain Party legitimacy, it has not helped promote voluntary tax compliance.