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An Analysis of China Coal Resource Tax Reform and Its Implications on Resource Saving

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Environmental Policy and Governance in China

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Abstract

As a traditional and feasible policy instrument, taxation is regarded for dealing with energy issues in politics and governance. This paper focused on the coal resource tax in China as an example of the energy tax and analysed the impacts of the tax system on fiscal revenue, resource conservation and energy savings for the period of 1994–2011. Based on this analysis, this paper discussed the goals and challenges of the 2011 coal resource tax reform, which changed the tax system from a volume-based system to a fixed-rate ad valorem one based on sales.

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Notes

  1. 1.

    BP Statistical Review of World Energy 2015 (British Petroleum, June 2015) (http://www.bp.com/statisticalreview; accessed 11 August 2015).

  2. 2.

    China’s Energy Conditions and Policies (Information Office of the State Council, December 2007) (http://www.china.org.cn/english/environment/236955.htm; accessed 11 August 2015).

  3. 3.

    Mining recovery ratio means the percentage of total tons of coal estimated to be recoverable from a given mine or area in relation to the total tonnage estimated to be in the demonstrated reserve base. It is a technology economic indicator to assess the superiority of mining technology and the work quality in an operation site.

  4. 4.

    Shortly after the resource tax began to be levied with the promulgation of the Draft Regulations on the Resource Tax, MOF announced the ‘Regulations on some Issues of Resource Tax’ (No. 296 of the Ministry of Finance, 1984). The resource tax on metallic and non-metallic products was suspended, which meant that, until 1993, taxable resources were essentially crude oil, natural gas and coal.

  5. 5.

    For detail of the pilot program, refer to He (2014).

  6. 6.

    According to the Three Industrial Classification Regulation 2002 (National Bureau of Statistics of China) and the Three Industrial Classification Regulation 2013, China’s secondary industry refers to the mining industry, manufacturing, power and heating, gas, water service industry and construction industry. It also includes the mining processing industry and the major industrial energy-intensive industries, which are the targets of the resource tax (http://www.stats.gov.cn/tjsj/tjbz/; accessed 11 Aug. 2015).

  7. 7.

    Effective coal resource tax rate = total annual resource tax revenue (10,000 yuan) ÷ total annual production of coal (10,000 SCE ton).

  8. 8.

    Compiled from data from the 2012 Chinese Statistical Yearbook (National Bureau of Statistics of China).

  9. 9.

    OECD (2013) Environment at a Glance 2013; IEA Energy Data Centre (2013); Energy Balances of Non-OECD Countries (2013 edition).

  10. 10.

    Calculated from the 2012 Chinese Statistical Yearbook (National Bureau of Statistics of China).

  11. 11.

    Ibid.

  12. 12.

    According to the Coal Economic Operation Situation Summary of 2012 (China Industry News, 9 March 2013, A6), in many provinces, the coal resource tax amounts to about 2–8 yuan per ton, but the coal price reported by the China Bohai-Rim Coal Price ranges from 620–810 yuan per ton.

  13. 13.

    2012 Chinese Statistical Yearbook (National Bureau of Statistics of China).

  14. 14.

    For example, the Shenhua Group, the largest coal producer in China, built its own railway line connected to Qinhuangdao harbour, allowing a certain amount of monopolistic use. This system restricts use by third-party companies. We confirmed the actual situation in Shaanxi Province in a field survey from 3–4 March 2014.

  15. 15.

    According to ‘Ease burden on coal producers’ (Economic Daily, 21 March 2013, A5) and ‘Clearance the fees and adjust the taxes’ (Chinese Coal Newspaper, 13 March 2013, M6).

  16. 16.

    CAAC Clean Air Management Report 2015 (Clean Air Alliance of China, 31 July 2015) (http://en.cleanairchina.org/product/7228.html, accessed 11 Aug. 2015).

Abbreviations

GHG:

Greenhouse gases

MOF:

Ministry of Finance

SCE:

Standard coal equivalent

CGE:

Computable general equilibrium

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Authors and Affiliations

  1. Researcher of Institute of Economic Reseach, Kyoto University, Kyoto, Japan

    Yanmin He

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Correspondence to Yanmin He .

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Editors and Affiliations

  1. Faculty of Policy Science, Ryukoku University, Fushimi-ku, Kyoto, Japan

    Hideki Kitagawa

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He, Y. (2017). An Analysis of China Coal Resource Tax Reform and Its Implications on Resource Saving. In: Kitagawa, H. (eds) Environmental Policy and Governance in China. Springer, Tokyo. https://doi.org/10.1007/978-4-431-56490-4_5

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