Resource tax reforms such as iron ore have been fully implemented since July

After the reform of the camp, China's taxation sector will once again usher in the "heavyweight" reform: July 1 will be a comprehensive implementation of the resource tax reform.

It is understood that more than 90% of China’s energy, more than 80% of industrial raw materials, and more than 70% of agricultural production raw materials come from mineral resources. However, the scope of China's current resource tax is relatively narrow, and it is difficult to assume the full promotion of resource conservation and protection. "The resource tax reform will further increase the efficiency of the use of resources and help change the mode of economic development," said Li Wanxi, director of the Taxation Institute of the State Administration of Taxation.

The ad valorem mechanism is the core

“The resource tax reform has two major core tasks: ad valorem pricing and expansion of the scope of collection. This resource tax reform fully reflects this reform request.” Li Wanjun said.

"Economic Daily" reporter learned from the State Administration of Taxation that at present, China only has coal resources and other six resources to implement ad valorem resources tax, and there are more than 100 kinds of quantities collected. The resource tax reform was fully implemented, and all items subject to ad valorem valuation were changed to ad valorem. This involves 21 items such as iron ore and gold ore, which have been changed from "quantitative" to "ad valorem." The basis for tax calculation has also changed. It is no longer based on the sales volume of raw ore, but is instead divided into raw ore, ore concentrate, Gold bullion and other major categories, according to their sales tax.

Li Wanxuan stated that the resource tax reform will effectively improve the regulatory mechanism that directly links taxation to resource prices. When resource prices rise and corporate profits increase, taxes increase accordingly; when prices fall and corporate profits decrease, corporate tax burdens ease.

Under the pressure of economic downturn, the reform will not only benefit the mineral enterprises in the predicament of operating, but also help stimulate market vitality and promote the country's rational collection of fiscal revenue. Compared with specific measurement, the resource tax ad valorem has the function of “automatic stabilizer” in organizing tax revenue and regulating economic functions. Taking crude oil as an example, the international oil price rose by 40.20% in 2011, and the ad valorem index led to a significant increase in resource tax revenue. When crude oil prices fell sharply by about 47% in 2015, China's crude oil resources tax revenue decreased by RMB14.3 billion year-on-year, a drop of 39%.

The self-adjustment mechanism for tax revenues was established to facilitate the rational development of resources, safeguard the financial interests of the origin of resources, and automatically reflect the changes in the prices of resource markets and protect the legitimate interests of mining enterprises, representing the reform of the current resource tax system. The direction.

This reform is not a one-size-fits-all approach, but it is more reasonable to retain a small amount of items that are suitable for volume measurement. For example, in the case of clay, sand and gravel with scattered operations, mostly cash transactions, and difficulties in obtaining taxable prices, according to the principle of facilitating collection and management, specific quotas are still imposed.

Another important measure of the reform of the resource tax is to expand the scope of taxation, from the current limited to mineral resources closely related to production, and further expand to ecological resources such as water, forests, grasslands, and beaches that are closely related to production and life. "This move will effectively increase the exploitation and utilization of natural resources and make the resource tax a veritable green tax," said Hu Yijian, School of Public Economics and Management at Shanghai University of Finance and Economics.

Water resource fee reform is the highlight

Starting the reform of the water resource fee reform is a major highlight of the comprehensive reform of the resource tax. This not only means that the scope of taxation is extended to the field of ecological resources, but also shows the reform ideas and characteristics of taxation and taxation.

The total amount of water resources in China is 2.8 trillion cubic meters, ranking sixth in the world, but the per capita occupancy is only 28% of the world average. Especially in northern regions such as Hebei, problems such as shortage of water resources and deteriorating water ecological environment are prominent. In order to promote resource conservation and utilization, as early as 1988, China had already introduced water resource fees. “This non-tax revenue is earmarked for the conservation, protection and management of water resources. However, in the process of collection, there are issues such as inadequate payers’ awareness and lack of effective means of collection and management.” Director of the Department of Property and Behavioral Tax of the State Administration of Taxation, Cai According to self-reliance, it is therefore imperative to adopt tax-to-tax reforms, to use the mandatory and normative features of taxation, to strengthen the government's ability to regulate and control water resources, and to effectively allocate water resources.

The pilot project for the reform of water resources and taxation was first tested in Hebei, and the exploration experience was implemented throughout the country for the next step. Cai Zili said that the introduction of water resources tax can effectively play a role in taxation regulation, and cooperate with other policies and measures to form a concerted effort to effectively suppress the over-exploitation of groundwater and irrational water demand, and promote the efficient use of water resources.

"In order to achieve a smooth transition from water resource fees to taxation, the provisions of the water resource fee are extended. The objects of taxation are mainly surface fresh water and underground fresh water, and temporarily do not include desalination of sea water," said Cai Zili, considering that water is different from ordinary water. For mineral products, some of the water wells with self-provisioned wells have not yet been included in the scope of the public water supply network and cannot determine the prices. Therefore, it is advisable to continue to use the specific quota method for the assessment.

Which people who use water resources need to pay taxes? “Utilizing water intake projects or facilities to directly use surface water and groundwater from rivers, lakes, and underground units and individuals as taxpayers for water resource taxation.” Cai Zili introduced a small amount of sporadic water intake and other units and individuals that are prohibited from obtaining permits for water abstraction. Is not a taxpayer for water resources tax.

"In addition, in order to ensure the smooth implementation of the water resources tax, without increasing the normal domestic water use and the general corporate water use burden, taxation and taxation will be carried out in a manner that avoids double collection of taxes and fees." Cai Zili said at the same time, to ensure the effectiveness of the reform, We will increase the collection standards for high-water-consuming industries such as car washing and bathing, and taxpayers who plan to use water.

Reasonably Determine Tax Rate for Profit-making Enterprises

After the full implementation of the resource tax pilot, how will the tax rate be determined? What is the impact on corporate tax burden?

“The country does not use a uniform tax rate. According to the basic principle of shifting taxes and fees, the State Department determines the tax rate margin, and each province determines the applicable tax rate within the range according to the actual situation.” Cai Zili said that this was due to two considerations: First, because of the The difference in resource grades and mining conditions is relatively large. The operating conditions of enterprises and their affordability are not the same. If a uniform tax rate is applied, the resource conditions and corporate differences in different regions cannot be taken into consideration, and the structural burden on some enterprises will also increase. Second, the tax rate will not be stipulated. The extent of the difference in tax rates determined by the provinces for some major mineral species is too large, which may affect the competition of these major mineral species in the unified national market.

In addition, in order to support the current mining economic development and reduce the burden on enterprises, the reform has also appropriately lowered the upper limit of the tax rate for most minerals. For example, the iron ore resource tax (fee) burden rate was adjusted from 1.23% to 7.55% to 1% to 6%, and the sea salt resource tax (fee) burden rate was adjusted from 3% to 9% to 1% to 5%. At the same time, tax incentives have been added. “The mineral products extracted from low-grade ore, waste rock, tailings, waste residue, waste water, and exhaust gas that are encouraged to be used are determined by the provincial people’s government based on actual conditions whether to reduce or exempt taxes,” said Cai Zili.

“The benefits of this resource tax reform are many.” Dai Hanbao, chief financial officer of Shandong Zhaoyuan Zhaojin Mining Co., Ltd., said that in addition to tax burdens, they are more concerned about how these tax reforms affect corporate development.

On the one hand, reforms will increase the transparency of collection and reduce controversy. “In the past, for the identification of the amount of ore, and the basis for the collection of compensation fees for mineral resources, there were cognitive differences between the enterprise and the relevant departments. After the reform, the sales amount was used as a basis for tax calculation, the calculation method was clarified, and the expropriation process was increased. Transparency." Dai Hanbao said that on the other hand, before the reform, the resource tax was levied on the amount of ore produced by gold mining companies, and the taxation was in the corporate production chain; after the reform, it was collected on the basis of the company's gold sales, and taxation occurred in the company's sales. In the link, the backward movement of the levy has objectively reduced the pressure on the company's funds and improved the efficiency of the use of funds.

Adjustments to mobilize local enthusiasm

With the full implementation of the reform of the business reform, business tax, the main subject of taxes, has withdrawn from the stage of history. In the process of reinventing the local tax system, the resource tax is high hopes.

“According to the current fiscal system, the income tax items included in the reform are all local revenues.” Cai Zili said that the current ratio of mineral resources compensation fees between the central government and local governments is 5:5, and the national autonomous region is 4:6. This reform is based on the principles of coal and other resource tax reforms. After the reform, the mineral resources compensation fee originally allocated to the central government was incorporated into local fiscal revenue, and the central government was no longer divided into revenues.

“The water resources tax is still divided according to the ratio of water resources fee to central and local 1:9.” Cai Zili said that considering the needs of the Hebei Province to raise the South-to-North Water Transfer Project, the State Council has clearly indicated that all the WRFs will remain in the province during the payment period. After the introduction of the water resources tax, the province’s water resource tax revenue is still left to the local government during the payment period.

In this reform, combined with the uneven distribution of resources and geographical disparities in China, and under the premise of not affecting the national unified market, local governments have also been given proper tax administration authority to mobilize local enthusiasm.

For example, for the 22 kinds of resource items listed in the “Resource Tax and Tax Rate Scale”, the central government shall determine the applicable tax rate and change it to the provincial people’s government to propose a specific applicable tax rate within the prescribed tax rate, and report it to the Ministry of Finance. The State Administration of Taxation approves and confirms. For example, for the 30 kinds of taxable products such as manganese ore and chromium ore listed in the Detailed Implementation Regulations of the Resource Tax, decentralization is determined by the provincial people's government according to the actual situation, and the tax rates and applicable tax rates are reported to the Ministry of Finance and the State Administration of Taxation for the record.