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China studying energy conservation
taxes
BEIJING - To address
the urgent need for energy conservation, China's
government bodies and research institutes are
working on a taxation system to curb soaring
energy consumption.
"We are currently
doing research work for the taxation with the
pertinent government departments and research
institutes, and a proposal is expected to be
reached within a couple of years," Yang Fuqiang,
vice-president of the Energy Foundation Beijing
Office told China Daily in a telephone interview
on Tuesday. Yang's energy foundation renders
financial support to researchers.
But the
final say over when to implement the taxation
system remains in the hands of the country's top
policymakers, including the Taxation
Administration and the National Development and
Reform Commission (NDRC), say industry experts.
NDRC sources said they have not participated in
the environment tax preparations, but are working
on various incentive-based policies to promote
energy conservation, which include several tax
measures. "We are studying a host of measures to
encourage the use of renewable energy sources in
the industrial sectors and transportation, and the
preparatory work is to be completed by the end of
the year," said Yu Cong, director of the Energy
Efficiency Center under the NDRC's energy research
institute.
The tax structure that Yang's
foundation is working on will cover all sectors
involved with energy use, from energy exploitation
to daily energy consumption, according to
researchers who are participating in the tax
drafting process. Details of the taxation rates
are not available, as research has not yet
progressed far enough, according to Yang. "The
rates are adjustable, depending on the country's
GDP growth and the other economic indicators, such
as the consuming pricing index."
The tax
levy will start with sectors that make less
efforts to implement relevant policies, according
to an insider. "It is easier to impose environment
and energy consumption taxes on products that have
little impact on the nation's economy, say,
refrigerators and motors," said Yang.
But
referring to the carbon tax which is to be slapped
on sectors such as power and petrochemicals that
emit carbon dioxide, which would have a
far-reaching effect on China's economic
development drive, Yang said research and
coordination work will take much longer, and will
be much more complicated. "It will take at least
five years for the carbon tax to take effect."
The tax measures are believed by insiders
to be able to effectively enable the world's
fastest-expanding economy to restrict its massive
consumption of energy. "Taxation is the most
powerful tool available in a market economy in
directing a consumer's buying habits, [superior
to] government rules or orders," said Wang
Fengchun, deputy-director-general of the research
department under the National People's Congress
Environmental Protection & Resources
Conservation Committee. But finalizing a complete
environmental taxation system, especially in
China's energy sectors, will take a long time,
Wang added.
He attributed the setbacks to
the country's large population and huge economy,
which mean balancing the interests of different
groups of people and various industrial sectors is
very difficult.
The world's second-largest
energy consumer after the United States vows to
save energy equivalent to as much as 400 million
tons of coal by 2010, and aims to reduce energy
use by 2.2% annually during the period, according
to the medium and long-term energy conservation
plan hammered out by NDRC at the beginning of
2005.
(Asia
Pulse/XIC) |
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