Research on the Impact of Shifting the Collection Stage of Passenger Vehicle Consumption Tax to Retail and Decentralizing Revenue to Local Governments

This paper systematically investigates China’s reform to shift the collection stage of passenger vehicle consumption tax from production to retail and decentralize revenue to local governments. It identifies institutional flaws in the current production-stage taxation model, including tax base erosion, weakened regulatory functions, and regional fiscal imbalances. The study demonstrates the necessity of the reform through a three-dimensional framework of tax system optimization, economic efficiency, and policy effectiveness. Projections show that the reform will effectively increase local fiscal revenue, optimize urban governance through a “tax-service” virtuous cycle, and establish a modern consumption tax system that fosters positive interaction between consumption-based taxation and local governance.