The Internal Logic and Implementation Paths of Industrial Structure Sophistication Empowering Tax Source Quality Improvement in Heilongjiang Province under the “4567” Modern Industrial System

Abstract

Taking into account the practical situation of advancing "4567" modern industrial system in Heilongjiang Province, based on industrial upgrading theory and optimal taxation theory, sorting out the internal mechanisms through which industrial structure sophistication powers tax source quality improvement from expanding the scale of tax sources, consolidating the foundation of tax sources and optimizing the tax structure. Using the panel data of prefecture-level cities in Heilongjiang Province (from 2014 to 2024) we find that both the industrial structure sophistication index and the comprehensive tax source quality index rise steadily with each other, indicating a significant positive correlation between these two indices. The pulling effect of industrial upgrading on tax source quality improvement is more evident in places with well-developed industrial supporting facilities such as Harbin and Daqing, while because of the lagging transformation of resource-based and border cities, there were obvious differences in tax source quality among different regions. Through industrial upgrading, enriching the tax base, balancing the distribution of tax sources, reducing the risk of cyclical fluctuation of fiscal revenue can be achieved. We propose some implementation paths, namely closely following the "4567" industrial layout to expand tax sources, extending industrial chains to increase the value added of tax sources, building an industry-tax coordinated fiscal and taxation adaptation mechanism, relying on smart taxation to strengthen tax source governance, which provide references for cultivating high-quality tax sources relying on the modern industrial system for the old industrial base in Northeast China, enhance its local fiscal sustainability.