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China's environmental tax to combat pollution now in force

Signal of change / China's environmental tax to combat pollution now in force

By Shola Powell / 20 Apr 2018

China's first environmental tax declaration period started on April 1st this year, as the tax law came into effect January 1st. Under this law, companies and public institutions which discharge listed pollutants directly into the environment, from water and air pollution to solid waste, are subject to taxes. Local tax bureaus have extended working hours over the weekend, as well as set up information desks to provide services and guidance, in order to make tax declaration more convenient. Tax declaration services are also available online.

This tax replaces the pollutant discharge fee, which China had been collecting for nearly 40 years. It makes the process easier for tax payers, by allowing them to know the exact tax payment due before declaration.

So what?

The tax aims to incentivise companies to cut emissions and upgrade production technology. With support from the governemnt, bureaus now have have the manpower to impose effective supervision and help establish China's 'green' financial and taxation system.

The degree of response will depend on the level of the tax: is it high enough to invoke action, and how rapidly? 

Will China take steps to expand this system in future, to ensure that not only corporations but also citizens and households are held to a similar 'green' standard? 


What might the implications of this be? What related signals of change have you seen?

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