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August 30, 2016

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Reduce pollution and pay less tax

CHINA’S lawmakers are reviewing a law that seeks to increase tax benefits for companies that cut pollution by more than the national standard.

If the plan is passed by the National People’s Congress, companies that reduce emissions to half the national requirement would only pay half the taxes levied for air, water and soil pollution.

The draft law proposes rates ranging from 350 yuan (US$52) to 11,200 yuan per month on industrial noise pollution. It also sets rates of 1.2 yuan on a stipulated quantity of air pollutants, 1.4 yuan on a stipulated quantity of water pollutants and a range of five to 1,000 yuan for each ton of different kinds of solid waste.

For instance, polluters will be levied 1.2 yuan for the emission of 0.95 kilograms of sulfur dioxide and 1.4 yuan for letting out 100 grams of petroleum in the water.

Carbon dioxide has not been included in the list, Finance Minister Lou Jiwei said as he explained the draft.

Provincial governments may “appropriately” raise rates taking local economy and pollution conditions into account, according to the draft.

Instead of taxing polluters, China currently collects a “pollutant discharge fee,” which features rates almost equal or lower than the standard tax rates in the draft law.

China established the “pollutant discharge fee” system in 1979. In 2015, it collected 17.3 billion yuan from 280,000 enterprises and other business operators.

The new law is expected to close loopholes in the current system such as inadequate implementation and administrative interference, which will help with China’s ongoing economic restructuring, according to the NCP’s Financial and Economic Affairs Committee.

To support agricultural development, the tax will exclude pollutants from agriculture (except those from large-scale animal husbandry) and mobile pollution sources including motor vehicles, ships and aircraft as taxes are covered in their price.

Normal emissions by urban sewage and refuse treatment plants will also be exempt.

Punishment has not been specified for tax evasion or fraud. The draft made it clear that the taxation will not offset criminal penalties for serious pollution crimes.

Lawmakers also reviewed a draft amendment to the Marine Environment Protection Law, imposing more severe penalties for pollution following a public outcry over small fines for massive oil leaks.

Minister of Land and Resources Jiang Daming said the law eliminates the upper limit in fines of 300,000 yuan (US$45,000) and imposes fines of up to 20 to 30 percent of direct losses caused by the pollution.

An oil spill at the Penglai 19-3 oilfield, China’s largest offshore field, occurred in June 2011. The oil spread to beaches in Hebei and Liaoning provinces. ConocoPhillips China was blamed for the incident that resulted in the release of approximately 700 barrels of oil into the Bohai Bay and 2,500 barrels of oil-based drilling mud onto the seabed. There was public anger at the time as the fine could not exceed 300,000 yuan.

The draft, submitted by the State Council to the National People’s Congress Standing Committee, echoes the central leadership’s recent emphasis on “conservation culture,” according to the NPC’s Environment and Resources Protection Committee.




 

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