More Considerations on Environmental Tax

Chinese Ministry of Finance and State Environmental Protection Administration disclosed at the ongoing annual political sessions that they are planning to collect in the country the so called environment tax.

Just as its name implies, environment tax means the tax levied to protect the environment. In some western countries, it consists of many types of taxes, including fuel tax, water pollution tax, waste tax and noise tax.

The 21st Century Business Herald（21世纪经济报道）, one of the leading financial and economical papers in China, carried a commentary on Wednesday, saying that to levy environmental tax can be conducive to both environmental protection and economic development. But the tax itself has its complications, so it might take a walk before its debut.

The paper says the problem also lies in how to harmonize all the taxes concerning environmental protection. In China, such taxes do exist, for example, resource tax, farmland use tax and urban construction and maintenance tax. If all these tax types run well, why do we need a new one to replace them? If the existing ones are ineffective, how can we combine these into the environment tax?

The paper continues to say that besides the concerns above mentioned, the burden from the tax should also be considered. It is improper if the environmental tax was introduced without cutting down

other taxes.

In conclusion, the paper says under the current situation that the income level of China's wage-earners is not high enough, to levy environmental tax, together with raising individual income tax levying threshold, can be practical in raising the income of citizens and boosting domestic demand.