Does Enterprise Digital Transformation Reduce Tax Compliance?

Abstract

Abstract In the era of the digital economy characterized by technologies such as artificial intelligence, big data, and cloud computing, digital transformation has become a key path for enterprises to enhance their competitiveness and achieve sustained growth. Existing research has not reached a consensus on the impact of corporate digital transformation on tax compliance behavior, and there is a lack of empirical evidence from a micro perspective on the level of an enterprise. This study explores the impact of enterprises' digital transformation on tax compliance behavior based on data from 2011–2022 Chinese listed companies. Results show that the digital transformation of enterprises can significantly reduce tax compliance behavior by reducing tax avoidance costs. Further research found that this negative effect has significant heterogeneity among enterprises of different ownership and size. Our findings not only expand the theoretical understanding of enterprise digital transformation and tax compliance but also provide theoretical support for governments to promote enterprise digital transformation and tax supervision.