Research on the comprehensive effect of the Porter hypothesis of environmental protection tax regulation in China

As a type of environmental regulation, environmental protection taxes (EPTs) have a Porter hypothesis effect. The Porter hypothesis effect is a comprehensive effect that includes the compliance cost effect, the innovation compensation effect, the weak Porter hypothesis effect, and the strong Porter hypothesis effect. The comprehensive effect of the Porter hypothesis is discussed through an evaluation of the implementation of an environmental protection tax law (EPTL). On the basis of the data of 729 heavily polluting enterprises, the mechanism of the regulatory effect of EPTs on the comprehensive effect of the Porter hypothesis is discussed via multiple linear regression equations. The results show that the compliance cost effect is still significant and that the innovation compensation effect, the weak Porter hypothesis effect, and the strong Porter hypothesis effect are declining. To realise the Porter hypothesis effect of environmental protection tax regulation more effectively, it is necessary to take the following measures: cultivate complex tax personnel; consult taxpaying enterprises on their information needs; optimise the collection and management process by applying the concept of precise service; reset the local tax rate; and increase the punitive provisions of the environmental protection tax law (EPTL).