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China to levy tax on polluting firms

CHINA is considering taxing polluting businesses to protect the environment, a senior government official said yesterday.

Zhang Lijun, vice minister of environmental protection, said collecting environmental taxes from polluting enterprises would be part of the country's tax reform.

"It has been put on the agenda of the ministries of finance, environmental protection and the state administration of taxation," Zhang told a press conference.

"We are jointly studying the issue, and when conditions are ripe, we'll launch the taxation system on polluting enterprises," he added.

The government had earmarked 210 billion yuan (US$30.7 billion) for environmental protection from the 4-trillion-yuan stimulus package for boosting domestic demand during the global economic downturn, Zhang said.

It had also enforced stricter penalties on companies that failed to reduce emissions, including fines of more than 50 million yuan on a polluting power plant and an administrative penalty on a county head in Hebei, he said.

The efforts had helped improve the nation's environment, with obvious changes in some environmental quality indicators in 2008, including the decline of permanganate in surface water and sulfur dioxide in the air, he said.

Zhang said air in a few cities remained "very polluted" and the problem of acid rain remained serious. Surface water pollution was still grim, and the environmental problems in rural areas increasingly prominent.

He dispelled worries that the stimulus plan, involving many new projects, might cause environmental problems and that governments might loosen requirements for environmental evaluation in order to approve more projects.

"The majority of the 4-trillion-yuan investment will be spent on infrastructure and projects to improve the ecological environment and the people's living standards," Zhang said.

"I don't see environmental problems in the stimulus plan because we have set a 'firewall' to block projects that could cause serious pollution or consume too much energy and natural resources."


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