Shim­mer­ing New Green Tax

The en­act­ment of the en­vi­ron­men­tal pro­tec­tion tax law mo­ti­vates en­ter­prises to ful­fill their so­cial re­spon­si­bil­ity, en­hances the ef­fi­ciency of en­vi­ron­men­tal gov­er­nance and helps build a beau­ti­ful China.

China Pictorial (English) - - FRONT PAGE - Text by Zhang Xue

On Jan­uary 1, 2018, China’s first en­vi­ron­men­tal pro­tec­tion tax law went into ef­fect. Ac­cord­ing to it, the tax is cal­cu­lated monthly and de­clared and paid quar­terly. So, in April, the tax will be col­lected for the first time.

The en­vi­ron­men­tal pro­tec­tion tax law is an in­sti­tu­tional guar­an­tee to im­prove China’s ecol­ogy. With ma­tur­ing in­sti­tu­tions and pro­gress­ing struc­tural re­form, the phi­los­o­phy of green de­vel­op­ment has been in­te­grated into Chinese peo­ple’s lives and pro­duc­tion, pro­mot­ing the coun­try’s eco­log­i­cal civ­i­liza­tion to new heights.

Two-way Mech­a­nism

The law tar­gets en­ter­prises and other en­ti­ties that di­rectly emit a tax­able pol­lu­tant, in­clud­ing air and wa­ter pol­lu­tants, solid waste and noise—the four main sources of the pol­lu­tion.

Mean­while, ac­cord­ing to the harm on the en­vi­ron­ment of dif­fer­ent pol­lu­tants, the law sets dif­fer­ent tax stan­dards to im­pose higher levies on worse pol­luters. For ex­am­ple, dis­charg­ing formalde­hyde re­quires pay­ing a tax 24 times higher than emit­ting the same amount of smoke and dust.

The law also uses tax breaks to en­cour­age three health­ier prac­tices: clean pro­duc­tion, cen­tral­ized pro­cess­ing and cyclic uti­liza­tion. For ex­am­ple, if a com­pany dis­charges tax­able air and wa­ter pol­lu­tants with den­si­ties lower than the stan­dards reg­u­lated by the state or lo­cal gov­ern­ments, the en­tity can get a par­tial tax break. And le­gal en­ti­ties re­spon­si­ble for cen­tral­ized pro­cess­ing of wa­ter and house­hold waste are ex­empt from taxes.

“The law adopts a two-way mech­a­nism by grant­ing tax re­duc­tions or ex­emp­tions to eco-friendly en­ter­prises and im­pos­ing pun­ish­ments on those vi­o­lat­ing emis­sion stan­dards,” ex­plains Dong Zhan­feng, vice di­rec­tor of the Depart­ment for En­vi­ron­men­tal Pol­icy at the Chinese Academy for En­vi­ron­men­tal Plan­ning. “This en­cour­ages en­ter­prises to cut emis­sions and pushes en­ergy-in­ten­sive and heav­ily pol­lut­ing in­dus­tries to up­grade and trans­form, which will pro­mote the coun­try’s ad­just­ment of its eco­nomic struc­ture and de­vel­op­ment mode.” Dong be­lieves that these mea­sures will ef­fec­tively pro­mote en­vi­ron­men­tal pro­tec­tion through tax lever­age.

Mo­ti­vated Up­grade

The en­vi­ron­men­tal pro­tec­tion tax re­placed a “pol­lu­tant dis­charge fee” that had been col­lected since 1979. Pol­lut­ing en­ter­prises paid the fee, and rev­enues were des­ig­nated for en­vi­ron­men­tal im­prove­ment.

The in­tro­duc­tion of a pol­lu­tant dis­charge fee played an im­por­tant role in pol­lu­tion con­trol. But the reg­u­la­tion did not have a strong le­gal foun­da­tion as the new en­vi­ron­men­tal pro­tec­tion tax law does. Be­cause some lo­cal gov­ern­ments and au­thor­i­ties in­ter­fered, the dis­charge fee was of­ten im­ple­mented in a way that hardly en­cour­aged pol­luters to change their ways.

“Ac­cord­ing to the en­vi­ron­men­tal pro­tec­tion tax law, the tax is paid in terms of the quan­tity of emis­sions,” elab­o­rates Dong. “The more you dis­charge, the more you pay. It is us­ing eco­nomic meth­ods to pres­sure pol­lut­ing firms to up­grade their tech­nolo­gies and

In Wuyi County, Zhe­jiang Prov­ince, the in­spec­tion team for en­vi­ron­men­tal pro­tec­tion checks a wa­ter sam­ple from the drain out­let of an en­ter­prise. VCG

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