China has raised a tax paid by coal producers in four provinces
starting from the beginning of this month, according to the State
Administration of Taxation.
Each province will pay a different tax level, with the charge
increasing from 1-1.9 yuan (12 to 23 US cents) a ton.
There has also been a call to change the way the tax is levied
to improve the extraction rate at mines.
The new tax will not have a great impact on coal producers in
the four provinces as the increase is not huge, said Wang Ye, a
researcher with CITIC Securities.
"It will not lead to a big increase in the price of coal," he
added.
The government ordered an increase in the tax to 3.2 yuan (40 US
cents) a ton for coal producers in Shaanxi and to 2.5 yuan (31 US
cents) a ton in Jiangsu.
The tax went up to 2.5 yuan (31 US cents) a ton in Jiangxi and
to 2.3 yuan (28 US cents) a ton in Heilongjiang.
It is the second time the government has increased the tax in
Shaanxi Province.
The tax authority ordered similar increases in many other
provinces about a year ago.
Currently, domestic coal producers only pay tax on the amount of
coal they extract. But some industry experts suggest the rate
should be based on a mine's whole reserves.
This would encourage mine owners to extract poorer quality coal
that might be more costly to extract and so cut down on waste.
The rate of extraction for China's state-owned coal producers is
around 45 percent, but this falls to only 15 to 20 percent at
smaller miners, far below the global level, industry figures
show.
As the world's biggest coal producer and consumer, China is now
dependent on the fuel for more than two-thirds of its energy
consumption.
(China Daily April 7, 2006)