Abstract: Tax and fee reduction policies serve as a crucial instrument for easing corporate burdens and revitalizing market vitality. As an essential source of external financing, corporate debt issuance is a good reflection of the issuer' expectations and risk-taking behaviors, thereby providing a useful lens for assessing the micro-level effects of fiscal policy interventions. This study investigates how actual tax and fee burdens influence corporate debt financing decisions, using a panel dataset of A-share listed firms in Shanghai and Shenzhen from 2010 to 2021. The empirical results show three main findings. First, a decline in effective tax and fee burdens significantly increases firms' marginal debt financing, suggesting that fiscal relief stimulates external financing demand. However, this effect is accompanied by shorter debt maturities—particularly among non-state-owned enterprises—driven by the crowding-out effect of intensified government credit demand, which further exacerbates short-term borrowing for long-term investment. Second, the mechanism analysis reveals that lightened tax and fee burdens enhance firms' risk-taking capacity and alleviate financing constraints, jointly conveying positive signals to both equity and debt investors. Third, heterogeneity analysis indicates that the positive impact of tax relief on debt financing is more pronounced among firms located in regions with higher levels of financial development, in jurisdictions with weaker tax enforcement, and among high-tech and small-to-medium-sized enterprises. By linking firm-level financing behavior with fiscal policy incentives, this study provides new micro-level evidence on the behavioral responses of debt financing under China's tax-and-fee reduction framework. The findings offer meaningful implications for improving fiscal policy design and promoting high-quality economic development.

Key words: tax and fee reduction, actual tax and fee burdens, debt financing, debt maturity structure