Government Plans to Institute Resource Tax on Coal
Last Saturday the government announced their plans to institute a resource tax on coal starting this December. The tax will be set between 2 to 10 percent and the first official number will be issued for the long anticipated plan. That State Council along with the China’s Cabinet stated that the country imposed a new resource tax on coal in September and canceled a series of existing charges in a move that was hoped to simplify the tax structure for struggling coal producers.
The range for the planned coal resource tax will be from 2 to 10 percent and the specific tax rates will be set by the provincial level finance departments just within the mentioned range. The range will be in line with the expectations that is based on previous reports on the changes to the resource tax that was aimed to encourage an efficient way of using coal, that is blamed for the severe air pollution problems.
The coal producers in China is one of the world’s largest consumer of coal fuel and is struggling due to a result of a massive supply glut and a collapse in coal prices. this pushed 70 percent of firms to declare losses this year based on the reports of the China Coal Industry Association. The ministry also stated on a different report that the government is planning to abolish the resource conservation tax for crude oil and natural gas and at the same time lift exploration tax by 6 percent.