To protect the environment it is necessary to reform the current tax system and impose more taxes upon heavy polluters, according to an article in China Youth Daily. An excerpt follows: 

The natural environment is a precious resource with unique economic value.

Given the headstrong pursuit of economic growth regardless of the environment in some localities, experts suggest we should introduce the concept of "green GDP." Based on that, it is also necessary to advocate "green taxes."

Our current tax arrangement does not take full consideration of environmental protection.

Imposing a special tax aimed at environmental protection is a common practice in many countries. Such a tax is meant to achieve certain goals while encouraging taxpayers to give up consumption or production that could negatively impact the environment. Such a tax can also finance the State's preservation of natural resources and the environment.

Canada and most countries in the European Union currently impose environment taxes upon products that have a negative environmental impact.

Judging from the perspective of environmental protection, China's current tax system has two major defects.

First, the design of tax items and tax rates does not tally with the goals of environmental protection and sustainable development.

The tax volume related to environmental protection only accounts for 8 percent of the country's total tax. And even this 8 per cent cannot be called an "environment tax" in the real sense, for it is imposed mainly on revenues accrued from the use of natural resources like coal, petroleum, natural gas and salt.

Therefore, these taxes are actually leveling off the premium income from natural resource usage instead of encouraging more effective usage of natural resources.

Second, the tax items related to environmental protection are too few. New tax items should be established to regulate the consumption of consumer goods endangering the environment, like plastic bags and batteries that are not recyclable.

As a result, the current tax system should be revamped and become more environment-friendly.

Taxes should be imposed upon usage of more natural resources, like minerals, water, forests, land and pasture. And the tax should be calculated according to the output from the natural resources.

Current fees collected from polluters should be changed into taxes and taxes should also be collected according to the amount of garbage produced by industries and residents.

Finally, industries that purchase pollution-reducing equipment should qualify for tax deductions.

(China Daily June 28, 2004)