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April 10 --China will speed up the development of environmental tax legislation that could penalize heavy polluters to help the central government pay for programs to address air, soil and water pollution, said a report from the State Council, China's top decision-making body.
Authorities from the State Administration of Taxation (SAT), the Ministry of Finance and the Ministry of Environmental Protection (MEP) have submitted proposals on environmental tax legislation to the State Council's Legislative Affairs Office.
The State Council and Standing Committee of the National People's Congress (NPC) will review and possibly modify the proposals before any release for public comment, the April 10 report stated.
The SAT is conducting research along with the Beijing municipal tax, environmental protection, finance and development and reform bureaus in the Haidian district of the capital to possibly launch pilot environmental taxes.
Jin Dongsheng, vice director of a tax policy research institute under the SAT, said environmental tax policies should include “polluter pays” principles, which the central government outlined as a priority during high-level meetings in 2013.
Sectors such as steel, cement, glass, coal, chemical and aluminum will likely be the first to face environmental taxes, an April 3 report from China Environmental News, a news agency under the MEP, stated. The report quoted officials saying it could take until August for the NPC Standing Committee to begin reviewing the draft legislation.
In addition to higher taxes for heavy polluters, authorities are considering cutting taxes for companies engaged in environmental protection industries. Those companies could be exempted from paying a value-added tax and could see potential cuts in corporate income taxes, said an April 2 notice from the SAT.
On April 3, the MEP and National Development and Reform Commission (NDRC) outlined policies to subsidize coal-fired power plants that install systems to remove sulfur dioxide, nitrogen oxides and dust emissions.
In a document, the groups said the subsidized coal-fired plants would install systems to automatically gather real-time information on emissions and dust.
Companies that fail to implement monitoring systems could have subsidies removed and face penalties up to five times the amount of their subsidy, according to the statement.
To contact the reporter on this story: Michael Standaert in Shenzhen, China, at email@example.com
To contact the editor responsible for this story: Greg Henderson at firstname.lastname@example.org
The State Council report on accelerating environmental tax legislation is available, in Chinese, at http://bit.ly/Q7P4iN.
A recent SAT statement on environmental tax reforms and possible exemptions for certain companies is available, in Chinese, at http://bit.ly/1n68z6O.
The NDRC and MEP joint statement on subsidy policies for coal-fired power plants to improve emissions control technologies is available, in Chinese, at http://bit.ly/1gNx2YY.
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