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China draws up draft law on resource tax

Xinhua | Updated: 2017-11-21 08:57
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BEIJING - China has formulated a draft law on resource tax in a bid to conserve natural resources and protect the environment.

The draft law was released Monday by the Ministry of Finance and the State Administration of Taxation for public comment.

"In order to give better play to the role of taxation in supporting resource saving and environmental protection, we must speed up work on a resource tax law, improve the legal system and make it more methodical, stable and authoritative," said MOF in a statement.

Nearly 800 billion yuan (about $120 billion) of resource tax was collected from 1994 to 2016, an annual average growth of 14.8 percent, with 95 billion yuan collected last year, according to MOF data.

The draft law basically maintains the current resource tax framework and rates formulated after a reform to levy such tax on most resources based on prices instead of quantities, the statement said.

China has experimented with price-based resource tax on such products as crude oil, natural gas and coal since November 2011 and expanded the reform to most products in July 2016.

Local governments will be authorized to set specific tax rates within certain ranges, according to the statement.

It said conditions are not ripe for legislation on a water resource tax, noting that further pilot reform is needed to improve the tax system.

The country is not yet prepared for levying resource taxes on forests and grassland, the statement said.

Under the draft law, Chinese and foreign companies jointly exploring crude oil and natural gas will pay resource tax instead of royalties.

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