BEIJING, Nov. 2 (Xinhuanet) -- China has extended a sales-based tax on oil and natural gas nationwide. It’s a move that aims to help save energy here, in the world’s fastest-growing major economy, and boost local government revenues to develop inland provinces.
Starting from November 1st, China will adopt the price-based tax calculation mechanism on sales of oil and natural gas, while discarding the old production volume-based tax mechanism.
Under the new method, oil and natural gas price fluctuations on global markets will impact the tax that can be levied from natural resources.
But under the new sales-based new tax mechanism, the amount taxed is like the water level in a teapot. The higher the price level is, the larger the tax will be. The oil and gas tax, ranging from 5 to 10 percent of sales, will be levied on both domestic producers and joint ventures with overseas companies.
Meanwhile, the volume-based tax mechanism will continue for coal and metal. China will levy a tax of 8 to 20 yuan on every metric ton of coking coal sold and 0.3 to 5 yuan a ton for other coal grades.
The levy on iron ore sales will be 2 to 30 yuan a ton, the tax on rare-earth minerals 0.4 to 60 yuan a ton, and the rate on non-ferrous metal ore 0.4 to 30 yuan a ton.
China rolled out a 5 percent tax on oil and gas sales in Xinjiang Uyghur Autonomous Region on a trial basis in June last year to help fund the development of western provinces.