Proceedings of the 2nd International Conference on Management Research and Economic Development

DOI: 10.54254/2754-1169/93/20240959

Major Issues and Optimization Paths in the Implementation

of Green Fiscal and Tax Policies
Dong Liu1,a,*
1
Anhui University of Finance and Economics, 962 Caoshan Road, Longzihu District, Bengbu City,
Anhui Province, China
a. Dong Liu [email protected]
*corresponding author

Abstract: In the current era of accelerating global economic development, countries

worldwide are facing the challenge of resource shortages, giving rise to the concept of green
sustainable development. This has also become an important principle for China in its pursuit
of sustainable development. Against this backdrop, the nation has proposed corresponding
green fiscal and tax policies. However, there are deficiencies in the implementation of
China’s green fiscal and tax policies. This paper analyzes the main issues in the
implementation process of green fiscal and tax policies, aiming to optimize the
implementation paths of green fiscal and tax policies by enhancing supervision of green tax
policy execution, improving publicity of green fiscal and tax policies, and refining green tax
incentives.

Keywords: Green fiscal and tax policies, Major issues, Optimization paths

1. Introduction
The report of the 20th National Congress of the Communist Party of China emphasizes the need to
improve fiscal, investment, pricing policies, and standard systems that support green development,
and to develop green and low-carbon industries. The fiscal and tax system plays a crucial role in
encouraging and guiding the transformation of economic development methods, the upgrading of
industrial structures, the adjustment and optimization of energy structures, the innovation of energy-
saving and environmental protection technologies, and the construction of green consumption models.
As we enter a new stage of development, it is essential to actively build a modern fiscal and tax
system that facilitates efficient resource use and the green low-carbon transition, thereby creating a
new chapter in the construction of a beautiful China. Scholar Xu Minjuan points out that China’s
economic development has entered a new phase, and the mode of economic development is gradually
changing. In the process of building a resource-conserving society, it is necessary to continuously
optimize fiscal and tax policies to effectively protect the environment while promoting economic
development [1]. Scholar Jiang Lilin suggests further optimizing legislative goals to reflect a carbon
reduction orientation, improving the stability of tax structures and tax incentives aimed at carbon
reduction, enhancing the coordination between different green tax categories, and strengthening the
collaboration mechanisms with technical inspection departments, thereby promoting green and low-
carbon development [2].

© 2024 The Authors. This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0
(https://creativecommons.org/licenses/by/4.0/).

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DOI: 10.54254/2754-1169/93/20240959

2. Green Fiscal and Tax Policies

2.1. The Meaning of Green Fiscal and Tax Policies
Green fiscal and tax policies refer to the use of tax measures to promote environmental protection
and sustainable development. These policies aim to guide and encourage economic activities towards
being more environmentally friendly, low-carbon, and resource-efficient. The primary goal is to
balance economic growth with environmental protection, achieving sustainable economic
development.
The definition of green fiscal and tax policies includes two key elements: green economic
orientation and tax tools. First, green economic orientation implies that the government encourages
and supports the development of green industries and the application of clean technologies to reduce
negative environmental impacts and improve resource utilization efficiency. Second, tax tools involve
using measures such as taxation, tax reductions, exemptions, and incentives to guide and motivate
businesses and individuals to focus more on environmental protection, reduce carbon emissions,
lower pollutant discharges, and conserve resources in their economic activities.
2.2. The Significance of Implementing Green Fiscal and Tax Policies
2.2.1. Promoting the Development of Environmental Protection Industries
Firstly, by providing tax incentives to the environmental protection industry, the government can
guide businesses to increase investment in the research, development, and application of
environmental protection technologies, thereby promoting innovation and growth in the
environmental protection sector. Secondly, adjustments in tax policies can reduce the competitive
advantage of traditional high-pollution industries, encouraging enterprises to upgrade and transform
towards the environmental protection industry, thus driving the overall upgrading and transformation
of the industrial structure. Additionally, green fiscal and tax policies can incentivize businesses to
proactively undertake environmental responsibilities, reduce environmental pollution, improve
resource utilization efficiency, and achieve a virtuous cycle of economic growth and environmental
protection.
2.2.2. Promoting Enterprise Transformation and Upgrading
Firstly, by imposing environmental taxes and other green taxes on high-pollution and high-energy-
consumption enterprises, the policies can effectively guide these enterprises towards transformation
and upgrading, encouraging increased investment in environmental protection technologies and
equipment, improving resource utilization efficiency, reducing emissions, and achieving sustainable
development. Secondly, green fiscal and tax policies can also motivate businesses to increase
investment in green industries, promote innovation and application of green technologies, and
enhance their competitiveness and sustainable development capabilities. Therefore, the
implementation of green fiscal and tax policies helps guide enterprises towards transformation and
upgrading, promoting economic development towards a green, low-carbon, and sustainable direction.
2.2.3. Reducing Environmental Pollution and Resource Waste
By taxing behaviors that cause environmental pollution and resource waste, green fiscal and tax
policies can effectively guide businesses and individuals to reduce environmentally destructive
behaviors. At the same time, green tax policies can also encourage businesses and individuals to adopt
more environmentally friendly and sustainable production and consumption practices, promoting the

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development of a green economy. These policies not only help improve environmental quality but
also drive the transformation and upgrading of the economic structure, achieving sustainable
economic development.
2.2.4. Promoting Social Equity
By imposing environmental taxes on high-income groups, green fiscal and tax policies can reduce
resource waste and environmental pollution while increasing government fiscal revenues. This
approach is conducive to promoting social equity and sustainable development.
3. Major Issues in the Implementation of Green Fiscal and Tax Policies
3.1. Unreasonable Design of Tax Policies
In practice, some green fiscal and tax policies may suffer from unreasonable tax rate settings and
imprecise tax incentives, which result in limited effectiveness in promoting the development of the
environmental protection industry and the efficient use of resources.
3.2. Insufficient Promotion of Green Fiscal and Tax Policies
One of the main issues in the implementation process of green fiscal and tax policies is the deficiency
in promotional efforts. Insufficient promotion may lead to a lack of public understanding of green tax
policies and their importance and impact. This can result in low public support for the policies,
potentially causing negative emotions and resistance. Without timely improvements in promotional
efforts, the current policy implementation could be hindered. [3] Therefore, it is crucial to enhance
promotional activities to increase public awareness and understanding of green tax policies.
3.3. Challenges in Green Tax Collection and Management
The difficulties in green tax collection and management include several aspects:
3.3.1. Insufficient Tax Collection and Management Capacity
During the implementation of green fiscal and tax policies, regulatory bodies may face challenges
due to insufficient tax collection and management capacity. The complexity and specificity of green
tax policies require regulatory bodies to possess specialized knowledge and skills to ensure effective
policy execution and supervision. However, tax collection and management agencies in some
countries or regions may lack the necessary talent and resources, increasing the difficulty of
supervision and execution.
3.3.2. Low Willingness to Comply with Tax Policies
Some taxpayers may have a negative attitude towards green tax policies, resulting in a low willingness
to comply. These taxpayers might perceive green tax policies as an additional burden or as having
adverse effects on their business activities, leading them to engage in tax evasion or avoidance, posing
challenges to tax collection and management.
3.3.3. Complexity of Tax Policies
Green tax policies may involve multiple steps and various types of taxes, adding to the complexity of
supervision and execution. Regulatory bodies need to ensure that taxpayers comply with all tax

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policies while dealing with the overlapping impacts of different tax types and the intricate work of
tax collection and management.
3.3.4. Challenges in Cross-Border Tax Supervision
In the context of globalization, the increasing frequency of cross-border trade and investment presents
challenges for the implementation of green tax policies in terms of cross-border tax supervision.
Cross-border transactions may involve the tax policies and regulatory systems of multiple countries
or regions. Regulatory bodies need to enhance international cooperation to address the challenges of
cross-border tax supervision.
4. Optimization Paths for Implementing Green Fiscal and Tax Policies
4.1. Increasing Tax Penalties for Pollution Emissions
Firstly, imposing heavier tax penalties on enterprises that exceed emission standards can compel them
to reduce pollution emissions and enhance their environmental awareness. This approach uses
economic measures to constrain enterprises, encouraging them to prioritize environmental protection.
Simultaneously, increasing tax penalties for pollution emissions can motivate enterprises to invest
more in environmental protection facilities and technological upgrades, thereby reducing pollution
emissions and improving environmental standards. When implementing increased tax penalties for
pollution emissions, the government can adopt differentiated tax policies. For enterprises with severe
over-standard emissions, higher taxes can be levied to strengthen the punitive measures against
polluting companies. Additionally, the government can establish comprehensive monitoring and
evaluation mechanisms to conduct real-time monitoring and assessment of enterprise emissions,
ensuring the fairness and effectiveness of tax collection.
Increasing tax penalties for pollution emissions can effectively push enterprises to change their
development methods and achieve green development. This approach also encourages enterprises to
invest more in environmental protection and enhance their environmental technology levels,
contributing to the construction of a beautiful China and the realization of sustainable development.
Therefore, increasing the intensity of green fiscal and tax policies, especially tax penalties for
pollution emissions, is a crucial environmental policy that helps advance environmental protection
efforts in China.
4.2. Strengthening the Supervision of Green Tax Policy Implementation
Enhancing supervision can ensure that tax funds are genuinely used for environmental protection
rather than being misappropriated or misused. Firstly, the supervision mechanism could include the
establishment of specialized supervisory bodies or committees responsible for overseeing the
implementation of green tax policies and regularly auditing and evaluating the use of tax funds.
Secondly, strict approval and regulatory procedures should be established to ensure that the use of
green tax funds complies with relevant regulations and policy requirements. Projects applying for
green tax fund support should undergo rigorous review and evaluation to ensure they meet
environmental standards and policy requirements. Additionally, a comprehensive fund supervision
mechanism should be established to monitor the flow and use of funds in real-time, promptly
identifying and correcting potential issues. Furthermore, supervision and accountability for relevant
units and individuals should be strengthened, with a sound penalty mechanism for violations. Actions
violating green tax policies should be legally addressed, with penalties for involved units and
individuals, and misappropriated or misused tax funds should be recovered. Through strict
supervision and accountability mechanisms, the misuse and misappropriation of green tax funds can

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DOI: 10.54254/2754-1169/93/20240959

be effectively prevented, ensuring that tax funds are genuinely used in the environmental sector,
thereby promoting the development and transformation of the green economy.
4.3. Enhancing Promotion of Green Fiscal and Tax Policies
To effectively promote green fiscal and tax policies, it is essential to shift from a passive to an active
approach, ensuring that the public understands these policies. [4] Staff members should thoroughly
learn the specifics of green fiscal and tax policies, understanding the detailed regulations and
clarifying the objectives of the promotion—whether to increase awareness or to emphasize the
importance and impact of the policies. Clear promotional objectives help in determining the focus
and methods of promotion. Subsequently, based on these objectives, a detailed promotion plan should
be developed, including the timeline, content, channels, and methods of promotion. The promotion
plan should be well-timed to ensure the information reaches the target audience promptly. Relevant
promotional materials should be prepared, and offline methods such as brochures, posters, and
promotional videos, as well as online methods through various internet platforms, should be utilized.
For instance, policy content can be showcased through short videos and infographics on platforms
like Kuaishou, Douyin, and Weibo, which are wide-reaching and engaging. For relevant enterprises,
targeted pushes can be set up, and direct outreach by staff to enterprises can be organized if necessary.
Additionally, any opaque regional policies discovered during promotion should be promptly reported
and adjusted to enhance transparency and ensure effective implementation.
4.4. Improving Green Tax Incentive Policies
This includes measures such as tax reductions or deductions for enterprises that meet environmental
standards to encourage investment in green technologies and products. By doing so, enterprises will
be more motivated to adopt environmentally friendly production methods, thereby reducing their
negative environmental impact. This approach also helps to promote the development of green
industries and foster sustainable economic growth. For instance, increasing tax credits or setting aside
specific reserves can facilitate the effective implementation and promotion of green fiscal and tax
policies through various incentives [5].
5. Conclusion
The implementation of green fiscal and tax policies faces several major issues, including the
unreasonable design of green tax policies, insufficient promotion of green fiscal and tax policies, and
challenges in the collection and management of green taxes. Strengthening the supervision of policy
execution, improving the promotion of green tax policies, and refining tax incentive policies can
effectively optimize the implementation of green fiscal and tax policies.
References
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[3] Liu, Y. (2021). Exploration of optimization strategies for fiscal and tax policies based on green concepts. Taxation,
15(26), 24-25.
[4] Qi, L. (2023). Main issues and strategies in the implementation of green fiscal and tax policies. Times Finance, (10),
90-92.
[5] Yang, G. (2019). Analysis of green fiscal and tax policies in the context of a resource-saving society. Taxation,
13(02), 24, 27.

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