The objective of business tax replaced with value-added tax aims to reduce the business burden and to maximize the business value. Based on the tax reform of replacing business tax with value-added tax, this paper empirically tests the influence of the tax reform on the firm value using the difference-in-difference method, and further examines the moderating effect of internal and external governance environment. The study finds that the reform of replacing business tax with value-added tax enhances firm value significantly, and the policy effect becomes more significant when the value-added tax rate changes lower after the tax reform. The governance environment can change the policy effect on the firm value. The shorter the pyramid level is, the stronger the policy effect is. The smaller the separation of rights is, the stronger the policy effect is. The better the market environment is, the stronger the policy effect is. Further study exploring the nature of property finds that the policy effect and the effect of governance environment on the policy effect are both significant only in non-state-owned enterprises and are not significant in state-owned enterprises. In order to enforce value promotion effect of the enterprises by tax policy, Chinese government should deepen the reform of value-added tax and the state-owned enterprises to further reduce the burden of the enterprises, all regions should accelerate the process of market-oriented reform to optimize macro-governance environment, and the enterprises should continuously complete inner management structure.