Although the reform of tax-sharing fiscal management system has effectively promoted the growth of central fiscal revenue and the improvement of macro-control ability, it has also significantly aggravated the financial pressure and debt risk of local governments. In order to build an efficient and stable local government financial system, a study on the evaluation of local government debt risk and governance strategy under the perspective of tax-sharing reform is proposed. Firstly, combined with relevant theoretical analysis, the impact of local government debt on economic development is analyzed from three aspects: positive, negative and no impact. By constructing the debt risk evaluation index system, the overall government debt risk level in China is evaluated, and the inter-provincial panel data and the KMV model are used to predict the local government debt risk situation in the next two years, and to derive the distance and probability of debt default of local governments at each province, so as to further quantify the default risk of each province and city. Using the M&A data in the Zephyr database, this paper further analyzes the impact of M&A activities of local governments and their subsidiaries on debt risk. Based on the analysis results, specific strategies for local governments to avoid debt risk are proposed, including improving the information disclosure system of local government debt, setting up a specialized government debt management institution, and establishing a debt service reserve system, with the aim of providing references for local government debt risk management.

Bai Xinyue. Research on the Evaluation of Local Government Debt Risks and Governance Strategies from the Perspective of Taxation Reforms. International Journal of Frontiers in Sociology (2024), Vol. 6, Issue 12: 72-79. https://doi.org/10.25236/IJFS.2024.061211.

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