Vietnamese Environmental Protection Tax Regulation and Corporate Financial Fraud: The Role of Information Transparency and Fintech

Corporate financial fraud poses a significant threat to sustainable development, particularly in countries transitioning from a planned economy to a globalised, market-based system, such as Vietnam. Taking the implementation of the resolution on Environmental Protection Tax (EPT) in 2019 as a quasi-natural experiment, the Difference-in-Differences (DID) method is employed to investigate the impact of Vietnamese EPT regulation on corporate financial fraud. The findings indicate that the resolution significantly reduces both the occurrence and frequency of fraudulent activities by up to 5.6%. Furthermore, the study highlights the critical role of information transparency in enhancing regulatory compliance and curbing unethical behaviour, as well as the positive influence of fintech in strengthening this effect. In addition, heterogeneity analysis shows that the EPT’s impact on inhibiting corporate financial misconduct is more pronounced among firms with lower levels of state ownership. Based on these results, the study offers strategic recommendations for businesses and policymakers, emphasizing the integration of information transparency and fintech to mitigate fraud, support ESG initiatives, and foster scalable, compliance-driven ecosystems. These insights are especially relevant for improving SME governance and advancing Vietnam’s sustainable development goals.