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China is considering raising taxes on resource exploitation as it seeks to reduce over-consumption, Ma Kai, China's top economic planner, told Monday's China Business News.

 

 

Ma derided the current taxation rate, based on the amount of resources exploited, as "obviously too low".

 

"While each ton of crude oil is sold at more than 3,000 yuan (US$375) in China, the cost in tax is only 14 to 30 yuan per ton," Ma revealed.

 

Over the next five years, central authorities will increase the rate of tax reform here, wielding a powerful tool to ensure maximum resource efficiency.

 

The process will be a gradual one, admitted Ma, highlighting the need for an incremental reform system, allowing for differing tax rates for differing grades of ores whilst also avoiding damage or inconvenience to consumers or industries.

 

Illustrating the disparity, Ma highlighted that while China's GDP accounted for 5.5 percent of the world economy last year, its energy consumption stood at 2.46 billion tons of standard coal, or around 15 percent of the global total.

 

In total, China used 388 million tons of steel last year and 1.24 billion tons of cement, or 30 percent and 54 percent of the world's total respectively.

 

The 130,000 mining enterprises that exist nationwide have had to cover little or no costs to obtain mining rights, leading to a low threshold for mining which has directly lead to criminal safety procedures.

 

Last November, China instituted a fee for coal prospecting and mining ventures in eight major coal-producing provinces and regions.

 

(Xinhua News Agency March 20, 2007)