Research on the influence of tax authority's full responsibility collection of social security fee on the contribution rate of pension insurance: evidence from China

Abstract

Abstract This paper uses actuarial models to analyze the impact of tax authority's full responsibility collection of social security fee on the scope for reducing the pension insurance contribution rate. The study finds that: (1) The tax authority's full responsibility for collecting social security fees can increase the pension insurance collection rate by 20.3%-25.2%; (2) If the balance of fund income and expenditure and pension treatment remain unchanged, the contribution rate can be reduced by 1.34–2.22% in 2021–2030; (3) If the state-owned shares are transferred to enrich the social security fund, the contribution rate can be reduced by 3.58–4.22% in 2021–2030, and the payment burden of enterprises can be significantly reduced. In short, if the tax authority is fully responsible for collecting social security fees, it can provide conditions for lowering the contribution rate of pension insurance, but it needs to cooperate with other policies, such as the transfer of state-owned shares to enrich the social security fund. Chinese government should gradually clarify the tax authority's responsibility for collection to reduce the contribution rate of pension insurance and stimulate the market vitality.

Keywords

• Full responsibility collection of tax authority
• Social security fee
• Contribution rate
• Downward adjustment
• Actuarial simulation