State Council Releases New Draft Environmental Law Tax

On June 10, the State Council Legislative Affairs Office (SCLAO) released a draft law on environmental taxes, proposing new taxes on businesses that produce solid, air, water and noise pollution, with a comment period that ends on July 9. The law was jointly drafted by the Ministry of Finance (MOF), State Administration of Taxation (SAT) and Ministry of Environmental Protection (MEP) to promote an "energy saving, and environmentally friendly" industrial system, according to the SCLAO.

In its current form, the draft law imposes taxes on stipulated amounts of pollution. It also states that tax rates will be doubled for emissions in excess of stipulated amounts, while rates can be halved if emissions are less than half the national standard. The new draft law also stipulates that provincial governments have the power to "appropriately raise" tax rates in response to local environmental conditions.

Last week, in a public interview, the Ministry of Environmental Protection (MEP) minister Chen Jining told reporters that "the Chinese environment is reaching or has already reached its limit." He went on to state that the government will continue to take "more forceful" steps in the coming 5 years to protect the environment and promote green development.