Price-based resource tax to expand
By Richard Fu |
January 27, 2011, Thursday
|
Print Edition
Print Edition
CHINA plans to expand a price-based resource tax nationwide in the next five years after trying it out in some western provinces and regions last year, the Ministry of Finance said.
As commodity prices have soared, a shift from a volume-based tax to a price-based levy will help raise funds to develop the resource-rich but poor areas. But it will hit profits of oil and mining firms.
The country in June introduced the price-based resource tax on a trial basis in energy-rich Xinjiang Uygur Autonomous Region, setting it at 5 percent of the sales value of oil and gas produced there. The new regime was extended to 12 other western provinces and regions on December 1.
In the next five years, China will reform the resource tax nationwide, Finance Minister Xie Xuren said in a statement dated Tuesday, the first time the government gave a timetable.
China's resource-rich provinces are in the less-developed central and western areas, and local governments failed to enjoy the price rally in resource commodities under the volume-based tax regime.
In December, China International Capital Corp estimated a price-based resource tax, if applied nationwide, could trim the 2011 profit of PetroChina Co by up to 8 percent.
As commodity prices have soared, a shift from a volume-based tax to a price-based levy will help raise funds to develop the resource-rich but poor areas. But it will hit profits of oil and mining firms.
The country in June introduced the price-based resource tax on a trial basis in energy-rich Xinjiang Uygur Autonomous Region, setting it at 5 percent of the sales value of oil and gas produced there. The new regime was extended to 12 other western provinces and regions on December 1.
In the next five years, China will reform the resource tax nationwide, Finance Minister Xie Xuren said in a statement dated Tuesday, the first time the government gave a timetable.
China's resource-rich provinces are in the less-developed central and western areas, and local governments failed to enjoy the price rally in resource commodities under the volume-based tax regime.
In December, China International Capital Corp estimated a price-based resource tax, if applied nationwide, could trim the 2011 profit of PetroChina Co by up to 8 percent.
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