China intends to implement flexible oil taxation rates adjusted for changes in international oil prices
China's plan to implement flexible petroleum tax rates adjusted to the rise and fall in international oil prices
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Author: Xu Yu BEIJING 2005-5-27 11:01:34
Hong Kong’s “Wen Wei Po†reported on the 26th from Beijing that the vice president of the China Petrochemical Industry Association, Pan Derun, stated at the “China Energy Strategy High-Level Forum†that the petroleum tax system reform should be mentioned on the basis of the oil development strategy and adopt a flexible tax system. We will further increase policy support for the exploration and exploitation of domestic oil and gas resources.
He disclosed that the State Administration of Taxation is conducting feasibility studies, reforming the existing fossil oil resource taxation model, and considering the changes in oil prices and the difficulty of mining at the time of taxation.
Pan Derun said that the petroleum tax reform includes seven measures including policy support, oil legislation, energy conservation, overseas strategy, diversification of import trade, alternative fuels for petroleum, and strategic reserves. He proposed to expand the VAT reform pilot project to petroleum and petrochemical enterprises, change the value-added tax from a production type to a consumption type, and appropriately reduce the value-added tax rate in the petroleum and petrochemical industries, and explore as soon as possible a tax system that is more in line with the special circumstances of the petroleum and petrochemical industries. Sustainable development provides policy support.
Experts said that implementing a flexible tax system linked with international oil prices will be the direction of petroleum taxation reform. According to an official from the Ministry of Land and Resources, although the specific policy has not yet been introduced, the general idea is that the tax rate will increase when the price of oil rises; the tax rate will also drop when the price of oil falls; the drop in oil price to a certain position will remove the resource tax.