Tax to boost Xinjiang's revenue
Source: Xinhua |
June 3, 2010, Thursday
|
Print Edition
Print Edition
CHINA'S government has introduced a new tax on sales of crude oil and natural gas in the Xinjiang Uygur Autonomous Region, the Ministry of Finance said yesterday.
The 5 percent tax aims to raise revenue for the local government of resource-rich Xinjiang, and is part of a package for the region unveiled at a central work conference held in Beijing last month.
The new measure, a shift from current taxes based on output, is also a move to save natural resources by raising the consumption cost. The government intends to impose the tax nationwide after regional trials.
Thick oil, high condensation oil and high sulphur natural gas are taxed less at 3 percent, while oil recovered by tertiary methods is taxed at 3.5 percent.
Jia Kang, director of the ministry's Institute of Fiscal Science, said the new policy was a big step forward in the reform of resource taxation.
The reform has been postponed twice in recent years. It was first delayed in 2007 on concerns that it would help speed up price hikes and add inflationary pressure to an overheating economy.
The second delay in 2008 was caused by fears of hurting enterprises amid an economic slowdown resulting from the fallout of the financial crisis.
The introduction of the tax came at the "best time" as China had seen gradual and steady recovery from the economic slowdown and had not seen "apparent" inflationary pressures, said An Tifu, an economist at the Renmin University of China.
Experts said the trial would pave the way for a nationwide rollout.
It would also improve the pricing mechanism for resources products and economic restructuring, and lift tax revenues for local governments, Jia said.
China formerly imposed a volume tax of up to 30 yuan (US$4.39) per ton of crude sold and up to 15 yuan per thousand cubic meters of natural gas sold.
Xinjiang is rich in crude oil and gas, with output of crude oil at 25.18 million tons last year, said Wang Yudai, professor of the region's Party school.
The amount accounted for about 13.3 percent of China's total crude output, which stood at 189.49 million tons in 2009.
The new tax policy would increase returns on crude sales by 4 billion yuan to 5 billion yuan, generating about 6.3 billion yuan to the local government's fiscal revenue, Wang said.
Chen Yuenian, an official from the Xinjiang taxation bureau, said the increased revenue could be used to improve people's livelihood and environmental protection.
President Hu Jintao said last month that resources development should be directly linked to the welfare of local people.
The 5 percent tax aims to raise revenue for the local government of resource-rich Xinjiang, and is part of a package for the region unveiled at a central work conference held in Beijing last month.
The new measure, a shift from current taxes based on output, is also a move to save natural resources by raising the consumption cost. The government intends to impose the tax nationwide after regional trials.
Thick oil, high condensation oil and high sulphur natural gas are taxed less at 3 percent, while oil recovered by tertiary methods is taxed at 3.5 percent.
Jia Kang, director of the ministry's Institute of Fiscal Science, said the new policy was a big step forward in the reform of resource taxation.
The reform has been postponed twice in recent years. It was first delayed in 2007 on concerns that it would help speed up price hikes and add inflationary pressure to an overheating economy.
The second delay in 2008 was caused by fears of hurting enterprises amid an economic slowdown resulting from the fallout of the financial crisis.
The introduction of the tax came at the "best time" as China had seen gradual and steady recovery from the economic slowdown and had not seen "apparent" inflationary pressures, said An Tifu, an economist at the Renmin University of China.
Experts said the trial would pave the way for a nationwide rollout.
It would also improve the pricing mechanism for resources products and economic restructuring, and lift tax revenues for local governments, Jia said.
China formerly imposed a volume tax of up to 30 yuan (US$4.39) per ton of crude sold and up to 15 yuan per thousand cubic meters of natural gas sold.
Xinjiang is rich in crude oil and gas, with output of crude oil at 25.18 million tons last year, said Wang Yudai, professor of the region's Party school.
The amount accounted for about 13.3 percent of China's total crude output, which stood at 189.49 million tons in 2009.
The new tax policy would increase returns on crude sales by 4 billion yuan to 5 billion yuan, generating about 6.3 billion yuan to the local government's fiscal revenue, Wang said.
Chen Yuenian, an official from the Xinjiang taxation bureau, said the increased revenue could be used to improve people's livelihood and environmental protection.
President Hu Jintao said last month that resources development should be directly linked to the welfare of local people.
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