Under the influence of multiple factors such as the slowdown of economic growth and tax and fee reductions, local fiscal balance is facing severe challenges. The sluggish growth of tax revenue has led to abnormal growth in local non-tax revenue, seriously distorting the structure of fiscal revenue and reducing the quality of fiscal revenue.

Based on the county-level data from 2016 to 2021, this paper uses a multi-period DID model to examine whether and how the reform of fiscal electronic invoice management can curb the high growth of non-tax revenue. The study finds that the reform significantly reduces the scale of local non-tax revenue, especially by cutting administrative and public service charges and confiscation income. Mechanism testing indicates that compressing the flexible space for non-tax revenue collection and enhancing regulatory efficiency are the core mechanisms through which the reform exerts the governance effect. Heterogeneity analysis indicates that this effect is more obvious in county-level regions, and regions with higher activity of the private economy, smaller scale of transfer payments, and larger deviation of revenue budgets and final accounts. Expansion analysis indicates that the reform will trigger a significant “substitution effect” among non-tax revenue, tax revenue, land transfer income, and debt income, with the substitution relationship between non-tax revenue and land transfer income being the most obvious.

The marginal contributions of this paper are as follows: First, it focuses on whether and how the reform of fiscal electronic invoice management can exert the governance effect of non-tax revenue, expanding the research on the policy effect of the reform. Second, it reveals the influence path of the reform from two aspects, enriching the research on the influencing factors of non-tax revenue collection and payment. Third, it uses county-level data to explore the policy effect of the reform in a more detailed manner, providing micro-empirical evidence for standardizing the management of non-tax revenue. It also offers ideas for improving the quality and efficiency of the reform and enhancing the governance capacity of non-tax revenue.