China mulls tax plan for environmental protection

BEIJING—Chinese government departments of tax and environment will try to work out a taxation plan to promote environmental protection in 2008 and the candidate plans are now under appraisal.
Two researchers with the Ministry of Finance Sun Gang and Xu Wen proposed three candidate plans of collecting environment tax in their report published in November of 2007, according to Beijing-based Caijing Magazine. Based on the principle of “pay according to profits”, the first plan suggests government collect tax from companies in accordance with how much they earn from the products which consume resources or pollute the environment, said Dr. Xu Wen. He said this kind of general taxation will be imposed on all the companies since almost all the products consume resources.
According to the second plan, companies would pay tax according to how much pollutant they have discharged, said Xu, adding that the tax will target the discharge of sulfur or sulphide, carbon dioxide, sewage, solid waste and other forms of pollutant. He said that the third plan would ask consumers of potentially polluting products, such as fossil fuel, ozone-consuming commodities,fertilizer and pesticide, to pay tax. Meanwhile, the Ministry of Finance said it might be a more pressing task for them to raise the resource and consumption tax to give more consideration to environmental protection while expanding the current taxation system and adding new kinds of tax.
Beside the plan for environment tax, the country has already adopted the law of environment protection and other regulations and is encouraging domestic companies to introduce more environment-friendly technology and production models, according to the SEPA-sponsored newspaper China Environment News. The public awareness of and participation in environment protection is also vital in this period of time, when China is trying to adopt a scientific and sustainable mode of development, the newspaper said.
The Chinese government will invest 1.35 percent of its gross domestic product (GDP) each year for the next three years in environmental protection. The State Council, China’s cabinet, publicized a belated five-year environmental protection plan for 2006 to 2010 on Monday.
“Most of the investment will go to treating water pollution,” said Zou Shoumin, director of the Chinese Academy for Environmental Planning, who took part in drafting the plan. He estimated the government would spend 640 billion yuan ($85.33 billion) on treating water pollution, 600 billion yuan ($80 billion) on air pollution and 210 billion yuan ($28 billion) on solid waste. In 2005, China spent 238.8 billion yuan ($31.8 billion) on environmental protection, accounting for 1.31 percent of that year’s GDP, according to a government white paper.
The plan, only adopted by the State Council in September, sets out guidelines, major tasks and measures for the government to tackle pollution. As part of the plan, China aims to cut its chemical oxygen demand (COD), a major index of water pollution, in 2010 by 10 percent from 2005 and sulfur dioxide emissions also by 10 percent.
By 2010, the plan says, 75 percent of China’s large cities will enjoy more than 292 days of good air quality (air quality level II or better) every year. In 2005, the percentage was 69.4. China’s air quality level II is equal to a pollution reading of between 51 and 100. The country issued a five-year environment plan for 2001 to 2005 but the targets set were not met.
According to the State Environmental Protection Administration (SEPA), sulfur dioxide emissions in 2005 increased by 27.8 percent over that in 2000 instead of dropping while the COD fell 2.1 percent from 2000 rather than 10 percent.—Xinhua