Based on a quasi-natural experiment of the “Third Phase of Golden Tax Project”, this paper takes A-share listed companies from 2009 to 2021 as samples, and empirically tests the effect of tax administration on enterprises' “Shift from Real to Virtual” by using a multi-period DID model. The study finds that strengthening tax administration can effectively suppress enterprises' “Shift from Real to Virtual”. The mechanism of action test shows that tax levy can tighten cash flow, reduce agency costs and thus inhibit enterprises' “Shift from Real to Virtual”, and effectively exert compliance and deterrence effects. Further study finds that the governance effect of tax levy is more prominent in high-margin firms, firms with high external financing, firms with strict internal control and firms with strict external audit. The results of the study provide a new perspective for exploring the governance strategy of enterprises' “Shift from Real to Virtual” and also provide a reference for improving the tax collection system.