China to levy environment tax to fight pollution

China’s parliament on 25 December 2016 passed a law levying specific environmental protection taxes on its heavy industry, effective from 1 January 2018. The law, first of its kind, is an effort by the nation to renew its fight against pollution.

The move follows the utter failure of the government in tackling with issues related to pollution including air, water and land pollution. Recently, a dangerous smog had enveloped almost whole of northern China.

According to China’s finance ministry, tax revenue is an important economic way to promote environmental protection.

Key Highlights

• The tax rate would be 1.2 yuan per unit of atmospheric pollution, 5 yuan per ton of coal waste, 1.4 yuan per unit of water pollution and 1000 yuan per ton of hazardous waste.
• Apart from this, 350 yuan will be levied per month on Industrial noise polluters if they cross the limit by 1-3 decibels, 700 yuan for crossing 4-6 decibels and 11200 yuan for crossing the limit by 16 decibels or more.
• This new law will replace all the earlier miscellaneous charges levied on emissions, which have been regarded as too low to deter polluters.

According to the Chinese Environment Minister Chen Jining, the new policy has not been created to increase the tax burden on enterprises but instead to improve the system and encourage them to reduce emissions. From now on, the more these enterprises will emit the more they will have to pay and the less they emit the less they will have to pay.

The law was passed after a series of delays as other departments of the Chinese Ministry – Ministry of Finance, the State Taxation Administration and local governments were worried about losing revenue once the earlier charges on emissions got replaced.

Apart from this, some government researchers have pointed out the clear omission of carbon dioxide from the levying list despite the fact that it is one of the major contributors to global warming.