Abstract: Taxation is a macroeconomic means of regulating the polluting behavior of enterprises. Based on the green tax and economic data of Yunnan Province from 2000 to 2020, this paper empirically studied the economic effect of green taxation in Yunnan Province by using vector autoregression (VAR) model. It was found that, the economic effect of green taxation in Yunnan Province was dynamic. In the short term, the increase in green taxes could drive GDP growth, but it would also lead to an increase in CPI and unemployment; In the long run, the impact of green taxation on Yunnan’ s economic growth would gradually weaken, which would be affected by factors such as economic growth, price levels, employment and investment, and there may be complex interactions between these factors and green taxation. Therefore, formulating green economy policies, investing in green infrastructure, and establishing ecological compensation mechanisms were important measures to deepen the green tax reform in Yunnan Province and promote the development of green economy.