Taxation reform on resource exploitation should benefit the public, says a signed article in Beijing News. An excerpt follows:

An official of the National Development and Reform Commission said recently that the resource tax on oil exploitation has not yet been established because the interests of various parties should be considered and coordinated.

Past experience reveals that the key criteria for judging a reform is whether the public will benefit. The key to benefiting the public is to adjust the existing pattern of interest distribution.

At present, the resource tax is a shared tax. Central finance takes the majority of the income, leaving only a quarter to local finances.

This is acceptable because the resources are public assets. But the problem is that many regions depend on local resources to develop their economy. In the process of resource exploitation, the local environment deteriorates and soil and water resources are seriously degraded.

Since the resource tax only accounts for a small portion of all tax income, central finance should give a larger portion of the resource tax income to regional finances.

This is an important issue to guarantee the smooth reform of resource taxation. A rational distribution would be to perhaps give regional governments at least a 60 percent share.

Also, the capital brought to local governments by the resource tax should be utilized to repair the damage done by resource exploitation to local residents and the environment.

(China Daily April 20, 2007)