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China introduces nationwide resource tax, adjusts tax rate (10/11/2011)

Updated: 2011/10/11 9:52:00

BEIJING, October 10 (Xinhua) -- The State Council, or China´s cabinet, announced on Monday it will tax all resource products starting November 1, extending the resource tax on domestic sales of crude oil and natural gas from some regions to the entire country.

The list of taxable resources widened from crude oil and natural gas to coal, rare earth, salt and metal from November 1, according to the country´s revised resource tax regulations.

The expansion of the resource tax is part of China´s efforts to encourage energy conservancy and limit environmental damage.

Sales of crude oil and natural gas nationwide will be taxed at a rate between five and 10 percent of their sales value, according to the revised regulations.

The regulations impose a sales tax ranging from eight (1.25 U.S. dollars) to 20 yuan per metric ton on coking coal and from 0.40 to 60 yuan per metric ton on rare earth ore.

Taxes on other types of coal stood unchanged at 0.30 to five yuan per metric ton.

The tax rate for other non-ferrous metals is set between 0.4 to 30 yuan per metric ton. Ferrous metals will be taxed at two to 30 yuan per metric ton.

Taxes on precious non-metallic ore will be between 0.5 to 20 yuan per kg or per carat, while taxes on cheap non-metallic ore are set between 0.5to 20 yuan per metric or per cubic meter.

China´s current resource tax is levied based on production volume instead of sales value, thus preventing the government from benefiting from energy and commodity price increases.

Nonetheless, energy giants and mining companies such as PetroChina and Sinopec have enjoyed large profit margins on the sale of resources under the current tax scheme.

A resource tax on oil and natural gas was introduced at a rate of five percent in northwest China´s Xinjiang Uygur Autonomous Region on June 1, 2010 before being extended to 11 other provinces in December last year.

Source: Xinhua

Authority in Charge: China National Textile and Apparel Council (CNTAC)

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ISSN 1003-3025 CN11-1714/TS

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