This paper investigates the influence of effective tax payment on the CEO promotion in local State Owned Enterprise (SOE) in China. Based on the analysis of listed local SOEs in China from 2004 to 2010, this paper tests the relationship between CEO promotion and tax payment. In addition, the moderating effect of pyramid layer is tested. This paper finds that there is a significant positive relationship between Effective Tax Rate (ETR) and CEO promotion, which suggests that CEOs may be aggressive in tax payment to please the local governments, who ultimately own the local SOEs. The current paper also finds that the relationship between ETR and CEO promotion is weakened as pyramid layers increase. Our conclusions enrich the literature on CEO turnover and the role of pyramid structure. The conclusions are also helpful for the SOEs' reform in China and other developing countries. First, this paper is among the first to investigate the relationship between ETR and CEO turnover. Second, this paper highlights the function of pyramid structure in mitigating government intervention. Third, this paper also adds to the research on effective tax. © 2018 by the authors.