China reforms resource tax on coal

Workers monitor a coal cleaning facility at Shenhua Ningxia Coal Industry Group Co Ltd in Yinchuan, the Ningxia Hui autonomous region. [Provided to China Daily]

The Chinese government on Monday vowed to reform tax on coal.

From Dec. 1, China will levy a resource tax on coal based not on quantity, but on price, and the tax rate will be decided by the provincial governments within a given range, according to an executive meeting of the State Council chaired by Premier Li Keqiang.

The coal tax reform will benefit resource regions and achieve balanced development between regions, according to the meeting. In 2011, China has reformed resource tax on crude oil and natural gas.

China can implement similar reforms on coal, the leading source of the country's energy, said Bai Jingming, vice director of the Research Institute for Fiscal Science under the Ministry of Finance.

Coal prices are relatively low now, making it possible for the reforms to move in a smooth way, and the economy will see little impact, Bai said.

To levy resource tax based on price will help prevent over-consumption and boost industrial upgrading, Bai said.

Similar reforms are scheduled for metal ores, non-metal ores and water, according to Bai.