China to introduce resource tax system in 2008

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Jan. 11 – Details of a new resource taxation system will be announced this year, an official with the State Administration of Taxation said on Thursday.

While the system is still being finalized, it may include a shift to taxation by price instead of volume and an expansion of the category of taxable resources Xinhua reports. The goal is to end a situation where resources are lightly taxed to support economic development, which has in turn led to waste and pollution.

Yang Suizhou, vice director of the SAT’s local tax department, told reporters that the agency was refining the plan to meet the requirements of the State Council, China’s cabinet.

China is attempting to cut energy intensity by 20 percent and emissions by 10 percent between 2006 and 2010. The government sees taxation on resources as an important lever to achieve their goals.

Taxation is a hot-button issue for the government and while a fuel tax was proposed in 1994, its introduction has been delayed by the fears that it may impose a large burden those who consume great amounts of oil, such as bus companies and taxi drivers. Yang told reporters that there is still no timetable for the introduction of the fuel tax.
Yang also told reporters that a “green” tax targeting heavy polluters was under research.

China raised taxes on lead-zinc, copper and tungsten ores in 2007, the first raise since 1994, as well as on coking coal.