The emergence of dishonest behaviors seriously erodes the credit foundation of market operation, disrupts market order, and endangers social fairness and justice. Therefore, the central government attaches great importance to the construction of the social credit system and regards the punishment for dishonesty mechanism as an important institutional arrangement. So, does the governance effect of punishment for dishonesty have a spillover effect?

In view of this, this paper explores the impact and mechanism of punishment for dishonesty on the tax compliance of affiliated enterprises with common shareholders. The results show that: (1) Punishment for dishonesty improves the tax compliance of affiliated enterprises with common shareholders. (2) Increasing external regulation pressure, strengthening the shareholder governance effect, and triggering the need for reputation remodeling are the mechanisms through which punishment for dishonesty promotes the tax compliance of affiliated enterprises with common shareholders. (3) When local judicial efficiency is higher, external attention is higher, and local integrity atmosphere is thicker, the promotion effect of punishment for dishonesty on the tax compliance of affiliated enterprises with common shareholders is more pronounced.

The contributions of this paper are as follows: (1) Taking the implementation of the joint punishment system for dishonesty as an opportunity, it explores how punishment for dishonesty enhances the tax compliance of affiliated enterprises with common shareholders from perspective of “tax credit behavior”, expanding the research on the governance effect of punishment for dishonesty and adding further evidence to the economic effect of credit. (2) Using punishment for dishonesty as the entry point, it verifies the mechanism and effect of the transmission and diffusion of credit governance among enterprises from the micro-enterprise perspective, clarifying the effectiveness boundary of punishment for dishonesty and providing a basis for further improving the social credit system. (3) It identifies the key drivers of tax compliance, including reputation rebuilding, value compensation, and regulation pressure management, expanding the influencing factors of corporate tax compliance and offering empirical evidence for enhancing tax governance.