Since China's resource tax law was formally implemented on September 1, 2020, the five resource and environmental taxes – the vehicle and vessel tax, environmental protection tax, tobacco tax, tax on the occupancy of cultivated land and the resource tax – have all been enacted.
Liu Yi, deputy director of the Property and Behavior Tax Department of the State Taxation Administration, said that the new resource tax law has six changes compared to the original resource tax system.
Expanding the scope of tax collection
The expression covering the scope of taxation for resource taxes changes from "the exploitation of mineral products and the production of salt” to "the exploitation of taxable resources." The law authorizes the State Council to levy a water resource tax for pilot units and individuals who use surface water or groundwater, in accordance with the needs of national economic and social development, providing a legal basis and reserving room for reform of water resource management.
Standardizing and detailing tax items
A total of 164 taxable resources items are listed in the Tax Item and Tax Rate Table attached to resource tax law, covering all the minerals discovered so far.
Regulating the management of tax reductions and exemptions
Chin's resource tax law clarifies effective, long-term tax reduction and exemption policies, such as exempting the resource tax on coal mining enterprises for safe production to extract coal into gas and reducing the resource tax for low-abundance oil and gas fields.
Clarifying the permission division methods of the different tax rates
The tax law directly determines the fixed tax rates for strategic resources such as crude oil, natural gas, medium and heavy rare earths, tungsten and molybdenum. Other taxable resources are subject to a tax rate range, which is determined by the tax law. Meanwhile, the provincial governments are authorized to propose a specific tax rate for their region and report to the Standing Committee of the People's Congress at the same level for decision.
Clarifying price-based taxation as the main method of resource tax collection
One hundred and fifty-eight of the tax items among the 164 integrands listed by the resource tax law are ad valorem. The other six tax items can be levied through price-based taxation or quantity-based taxation according to the convenience of collection.
Clarifying the different tax rates for crude ores and beneficiation
The resource tax law clarifying the different tax rates of crude ores, and beneficiation not only ensures the fairness of taxation but also promotes tax declaration, which is an optimization of the resource tax system.
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