October 07, 2008

China to release resources tax reform scheme

According to Mr Shi Yaobin head of Tax Policy Department under the Ministry of Finance that China will adopt ad valorem tax rather than unit tax to safeguard resources and improve efficiency. He said "This reform scheme is basically mature and will probably come out this year."

According to Mr Shi the government considers introducing environmental protection tax and adjusting the coverage and scope of consumption tax to encourage the research and utilization of green technologies.

The government is expected to release ten tax collection regulation documents and five guiding catalogue on industrial development in the near future in addition to other regulation on costs and expenditures.

Meanwhile, comprehensive calculation of individual income tax will be introduced from previous item specific calculation, and a sound property tax system will be established with the introduction of the property tax. Substantial tax incentives such as value added tax and income tax will be employed to prompt the development of nuclear power, renewable energy, wind power and other clean energy.