Financial Impact of Consumption Tax Collection Point Shift in the Chinese Baijiu Industry—A Dynamic Simulation Based on DFSM and Stackelberg Game
Abstract
: The proposed shift of consumption tax collection from production to retail restructures fiscal policy in China’s baijiu industry, altering tax timing, base, and subject. We examine whether deferred tax benefits offset profit erosion from tax base expansion and how brand heterogeneity mediates these impacts. A Dynamic Financial Simulation Model integrated with a Stackelberg supply chain game simulates four policy scenarios using 2019 – 2025 data from Kweichow Moutai, Shanxi Fenjiu, and Luzhou Laojiao. Results show that the implicit financing effect from deferred tax correlates positively with channel circulation time; Moutai captures RMB 1.39 billion in time-value savings under the channel-circulation basis. Tax base expansion disproportionately burdens high-markup brands, increasing Moutai’s tax burden by 130.7% under retail-shift versus 33.2% for Fenjiu. Brand bargaining power positively moderates tax pass-through in the calibrated model : Moutai (θ = 0.85) transfers 85% of incremen tal tax to consumers, whereas Laojiao (θ = 0.65) absorbs 35% of the incremental burden, compressing its own margin. Retail compliance costs exhibit diseconomies of scale, threatening small distributors. The revenue-neutral mixed variant (S3′) balances revenue neutrality with feasibility, limiting the ROE impact to marginally positive +0.17 to +0.35 percentage points, whereas the full retail shift (S2) imposes a −14.52 pp shock on Moutai. We provide the first unified framework combining cash-flow time-value theory, inventory valuation theory, and supply-chain game theory for consumption tax analysis, with policy recommendations for gradual reform.