(Leider steht keine deutsche Übersetzung für diesen Bericht zur Verfügung.)

According to information released by Chinese Academy for Environmental Planning on August 4, 2010, the Ministry of Finance (MOF), the State Administration of Tax (SAT), and State Environmental Protection Administration (EPA) will soon jointly submit a plan to State Council for an environmental tax on a trial basis, and Hubei, Hunan, Jiangxi, and Gansu are expected to be the first four pilot areas. Earlier, the Property and Behavior Tax Division under SAT held a conference on environmental tax in Yinchuan city, Ningxia province with local tax executives from four pilot regions. The conference was held to collect advice and suggestions from experts and local tax officials and inform local tax authorities of the progress of environmental tax collection and pilot schemes.

Proposal on Environmental Tax for a Long Period of Time
Environmental tax was first formally proposed by CPPCC members in 2007 as a move to raise awareness of environmental degradation but was not adopted. In the same year, the three government agencies began researching on environmental tax to evaluate the necessity and feasibility of levying this tax. In 2009, the official Xinhua News Agency published a story saying that conditions for environmental tax legislation were “basically ripe”, but the plan was further delayed by global financial crisis.

Three Progressive Stages
Due to complexity of environmental problem in reality, some experts said that details in the plan such as tax rate, scope of taxation, coordination between tax and environmental authorities, and tax reductions and exemptions, need further discussion. Regarding the timetable for the implementation ofenvironmental tax, China Council for International Cooperation on Environment and Development (CCICED) has proposed detailed timetable to establish environmental taxation system in China on three stages.

• Stage I: It will take three to five years to further improve taxation system of environment-related taxes, such as resource tax, consumption tax, and transport tax. Sulfur dioxide, nitrogen oxide, carbon dioxide, and waste water discharge are possible taxable items for environmental tax.
• Stage II: It will take two to four years to further complete taxation system on other environment-related taxes. Scope of environmental taxes will be expanded, those environmental taxes not levied on Stage I will be levied on Stage II.
• Stage III: It will take three to four years to further expand the scope of environmental taxes. Along with reforms and optimization on environmental tax system, a more mature and comprehensive environmental tax system will be established.

Impact on Major Industries
There were experts revealing that environmental tax would be levied for specific pollutants which are mainly determined technical feasibility. Since the discharge fees of COD (chemical oxygen demand) and sulfides have been charged for many years and monitoring measures are relatively efficient and precise, thus it is very likely one of these two will be chosen as the target pollutant.

If environmental tax is levied on sulfides, it will have greatest impact on thermal power plants, followed by steel, building materials, and chemical industries. If environmental tax is levied on COD, it will have a major impact on urban sewage treatment plants, followed by chemical and papermaking industries.

With the introduction of environmental taxes, energy saving and environment protection awareness of enterprises are expected to increase strongly, which will boost social demand for environmental services. If environmental tax is levied on sulfides, it will bring great business opportunities to desulfurization enterprises.

By courtesy of ©ACMR-IBISWorld Reports, 2010

ACMR ALL CHINA MARKETING RESEARCH CO., LTD