Legislation

New environment tax is forcing polluters to change their ways By Deng Yaqing

In Laicheng District of Laiwu, an industrial city in the center of east China’s Shandong Province, chemical, iron, steel and cement manufacturers have been bracing themselves for a significant change: On January 1, the country’s first tax designed specifically for environmental protection came into effect.

“Since the Environmental Protection Tax Law was approved at the end of 2016, we have been contemplating how to intensify emission reduction efforts in order to pay fewer taxes,” said Li Yong, production manager of Laiwu Lianyun Cement Co. Ltd., a local cement manufacturer.

In the past year, a total of 20 million yuan ($3.11 million) has been invested in technological improvement, Li explained. For example, the concrete grinders they purchased have helped eliminate half of the company’s pollution sources. At the same time, 18 new bag-type dust collectors have enhanced their dust collection efficiency from 98 percent to 99.9 percent, according to Li.

The environmental protection tax, which brought an end to the pollutant discharge fee which China had been collecting for nearly four decades, targets enterprises and public institutions that discharge listed pollutants directly into the environment.

For years, critics have called for the fee system to be replaced with legislation because many local governments had a tendency to exempt those high-polluting enterprises that made major contributions to local GDP growth. Under the new system, companies must pay taxes for producing noise, air and water pollution as well as solid waste, which will then be apportioned to local governments to be put toward efforts to further curb pollution.