China’s “green tax law comes into effect this month. The law is considered a major landmark in China environmental law and protection.
The new environmental protection tax will replace an older pollutant discharge fee. This fee has been on the books since 1979, however there has been a history of uneven enforcement and evasion in some parts of China.
It’s interesting to note that the enterprises and individuals who will be subject to the “new” green tax are essentially the same as those required to pay the old pollution fee. Its primary targets are enterprises discharging any pollutant. Four categories of pollutants are recognized under the law: air, water, solid waste, and noise pollution.
Though some in China had hoped for a “Carbon Tax” a carbon dioxide taxation scheme was ultimately not included.
The tax is calculated based on type and volume of the specific pollutant discharged and will closely follow the former pollution fee system. There are exceptions available if pollutants will be discharged in relatively small amounts.
The new tax law clarifies issues of enforcement and administration which were found regarding the pollution fee, centralizing the process. The law is the first time tax and environmental authorities in China will work cooperatively to implement and collect a tax.
It should also be noted that the law calls for penalties to polluting enterprises for environmental damage caused by the pollutants they have discharged. This will be on top of the standard tax, and will serve as further deterrent to widespread pollution.
The law is rightly viewed by many in international and Chinese environmental circles as a major step forward. By centralizing and modernizing the collection process, effective coverage will be increased, allowing authorities to maximize the impact and benefit of the law.
This follows the trend in China of increasing environmental protection in the wake of three decades of widespread economic growth.