As a tax for enviromental and resource protection, the reform of resource tax has been developing for a whole year. About its recent progress and effects for promoting supply-side structural reform, economic restructuring and upgradation and ecological civilization construction, recently, the tax authorities gave a report to answer these questions.
The core effect is:
Resource tax by means of ad valorem makes a promotion of Cutting excessive industrial capacity
From July 1, 2016, China has made a full implementation of clearing expense and profiting tax resource, reforming to ad valorem , improving the enviromental tax system, rationalizing the relationship between taxes and expenses and finally striving to build a fair, standard and efficient resource tax collection and management system.
Changing from quantity-based collection to ad valorem collection is the highlight of this resource tax reform, “ad valorem collection establishes a direct connection between resource and the price adjustment mechanism, which makes the resource tax income can be adjusted by the market price ( it can reflect the market supply and demand directly ) to adjust resource benefit and guarantee a healthy operation in resources industry as well as to improve the efficiency of resource usage and to strengthen the ecological protection consciousness of the whole society”, Hu Yijian, the professor of Shanghai University of Finance and Economics, said like that.
At the end of 2015, the central economic working conference made arrangements to put the "Cutting excessive industrial capacity" in the first place of the structural reform of the supply side. It pointed out that coal and other mining industries should control the increment strictly and prevent the excess capacity .
After the resource tax has been reformed in AD valorem duty , there is an impact relationship between “tax income” and “market price”. it is no doubt that this relationship will boost the healthy development of mining industry. Taking Shanxi, one of China's top coal-producing provinces, for example, in the first half of this year, coal price in Shanxi showed a new increment to 433 RMB/ ton, an increment rate of 87%; Coal resource tax revenue reached to 13.9 billion yuan,“the tax reform will put mining enterprises into a regular track so that they can control productions consciously, it will be a great help to reduce excessive capacity.”Sun Qun, the state administration of taxation property tax department deputy director, said.