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Page added on September 21, 2012
China: Individuals to be taxed for oil consumption
China is expected to change its oil consumption tax coverage to individuals from companies, and to tax consumers at the gas station after a consumption tax reform, said a tax official at the 5th General Assembly of Chinese Corporations’ Tax Management and Innovation on Thursday.
The country will also adjust the scope of taxation, to increase the taxes for high energy consuming, highly polluting and resource-based products, said Cong Ming, an official from the State Administration of Taxation.
“Tax cuts may include cosmetics and gold, which have already become mass consumer goods and are not luxury products,” Cong said.
It’s necessary for the consumption tax to be collected explicitly instead of implicitly, he said.
He said that it is not easy to make a simple comparison between oil prices in the United States and China because oil prices in the US include tax and in China they don’t.
The consumption tax has a macro-economic adjustment function, and is already the fourth-biggest tax, after the value-added tax, the income tax and the business tax. It is mainly aimed at oil products and luxury products, such as gold, silver, luxury watches and cosmetics.
4 Comments on "China: Individuals to be taxed for oil consumption"
Kenz300 on Fri, 21st Sep 2012 5:52 pm
China is well aware of the limits of their energy resources. That is why they are investing heavily in electric vehicles and battery technology. They know they can not compete with the worlds auto makers using gas and diesel technology. They are hoping to leap frog the auto industry by pushing electric vehicle production.
Welch on Fri, 21st Sep 2012 10:25 pm
We should have a graduated tax for gas. First 200 liters at base price, progressively more after that. China is way ahead on this. Kudos.
Arthur on Fri, 21st Sep 2012 11:29 pm
Taxes should be used to fund investment in renewables. The higher taxes are, the better.
Ken Nohe on Sat, 22nd Sep 2012 1:54 am
Taxes are proactive, prices are reactive. What the one cannot do the other will.
China has very, very little room for maneuver. If the GDP stops growing the “machine” explodes and the “legitimacy” of the Chinese government is gone.
China will implement some taxation on oil but not much, they can’t risk slowing down the economy much beyond the natural slowdown already occurring and even less take away the new “toys” that the Chinese consumers just acquired.