Coal tax reform to ease burden on environment
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E-mail Xinhua, December 1, 2014
Analysts from Taiyuan coal trade center do not see a price hike for coal in the fourth quarter, despite a modest increase of demand during the heating season and industrial consumption due to sluggish economic growth.
More than 70 percent of the coal producers are in deficit, according to statistics from China National Coal Association.
Under the coal tax reform, the market is to play a decisive role in resource distribution, as required by the Third Plenary Session of the 18th Communist Party Central Committee held in November, 2013.
"The current practice does not reflect the scarcity of resources on the one hand, and leaves a loophole that allows some coal producers to conceal their real production and sales on the other," said Geng Mingzhai, head of school of economics, Henan University.
The waste during production and damage to the environment have not been calculated in the collection of taxes.
"This is to be changed in the new tax reform," said Geng.
The short-term benefit for coal producers is obvious. They need not pay dozens of kinds of fees charged in various names.
As a result of balancing local finance and coal producers, however, it is much likely the overall burden of coal producers will remain unchanged, said Kong Qingwen, chief of the bureau of finance, Wuhai City, Inner Mongolian Autonomous Region.
Kong suggested local governments consider coal mining cost when imposing the tax, and try every means to help coal producers get through the tough time.
According to the reform plan, provincial governments are the one to decide the tax rate within a specified range of two to 10 percent.
"Local governments decide how much tax coal producers should pay under the general principle of reducing their burden," said Geng. "In cases like Shanxi, it's a game between the government and coal producers, because the government in debt also wants the income."
A government official from Shanxi who declined to be named disclosed that the tax rate set by the province is less than 8.6%, which is to cut 17 billion yuan (2.78 billion US dollars) fees to be charged with coal producers.
Local governments' appetite, however, can be counterbalanced when higher rate weakens the competitiveness of their tax payers in the market, said experts.
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