Tax reforms and fiscal restructuring are reshaping the institutional terrain of emerging markets, yet headline reforms often interact with entrenched central–local relations in ways that generate unintended strategic risks for firms. This dissertation examines how fiscal centralization reshapes firm tax burdens and compliance behavior, using China’s 2012–2016 Sales-to-VAT reform as a natural experiment. I argue that when central authorities recentralize revenue, subnational governments compensate by intensifying enforcement and fee extraction in adjacent domains, redistributing compliance costs across firms in heterogeneous ways. The empirical strategy draws on annual tax records covering roughly 80,000 firms from 2007 to 2016, combined with semi-structured fieldwork in China. Using a staggered difference-in-differences design (Callaway and Sant’Anna, 2021), I show that centralization shifts the locus of fiscal pressure from formal tax liabilities toward administrative fees and overdue obligations, with effects concentrated among large and visible firms. The findings extend organizational control, institutional theory, policy-uncertainty, and corporate political activity research by recasting host-country fiscal centralization as a shock to subnational enforcement incentives — and by clarifying when firms should reorient nonmarket strategy toward provincial and municipal arenas.