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The Environment Protection Tax Law was promulgated in Dec 2016 and related implementation regulation published in Dec 2017, both were implemented on Jan 1, 2018 to coincide with the cancellation of the pollutants emission fee. H1 2018 taxation data shows that a total of 9.7 billion RMB was collected, which is 22% higher than the amount collected from the pollutants emission fee from the same period in 2017.
During REACH24h’s 10th annual Chemical Regulatory Affairs Conference, Dr. Feng Long from MEE presented a comprehensive interpretation on the environment protection tax law including an overview of background, requirements and impact on industry.
The tax law stipulates the enterprises, institutions and other manufacturers/operators that directly discharge taxable pollutants to the environment should pay according to laws/regulations.
Taxable pollutants refer to atmospheric pollutants, water pollutants, solid waste and noise as stipulated in the Environmental Protection Tax Credit Tax Schedule and the Taxable Contaminants and Equivalent Values Table attached to this Law, including:
Water pollutants: 61 kinds + PH value, color, coliform group, residual chlorine
Air pollutants: 44 species
Solid waste: general solid waste and hazardous waste
Noise: Industrial noise (construction noise is exempted)
Tax per unit on air and water pollutants is stipulated based on a range of values which allows local governments to set the particular value in excess of national recommendations. Tax per unit on solid waste, however, is a set value and local governments have no discretion here. Most provinces and municipalities directly under central government have tailored their tax level based on individual pollution status and economic impact on key industries.
The law introduced a concept of pollution equivalent, which standardizes the tax approach to a broad spectrum of inherently different pollutants. For a given pollutant, the smaller the pollution equivalent value is, the greater the potential harm the pollutant poses to the environment and thus confers a greater tax burden on industry associated with the pollutant.
