China sets range for coal resource tax of 2-10 per cent
The mainland will institute a resource tax on coal of between 2 per cent and 10 per cent in December, the first official numbers to be issued for the long-anticipated plan.
The mainland will institute a resource tax on coal of between 2 per cent and 10 per cent in December, the first official numbers to be issued for the long-anticipated plan.
The State Council said in September that the mainland would impose a new resource tax on coal and cancel existing charges in a move to simplify taxes for struggling coal producers.
"The coal resource tax range will be between 2 per cent and 10 per cent, with the specific tax rates to be set by provincial-level finance departments within the above mentioned range," the Ministry of Finance said in a statement posted to its website.
The range is in line with expectations, based on previous reports in Chinese media. Changes to the resource tax are aimed at encouraging the more efficient use of coal, which has been blamed for severe air pollution.
The move follows a decision by Beijing to impose import tariffs on coal. Australian coal producers would be the hardest hit as its main coal export rival, Indonesia, is exempt from the tariffs through the Association of Southeast Asian Nations' free trade agreement with China.
The Minerals Council of Australia has urged the Australian government to ask Beijing to reverse the decision, saying it would ultimately hurt Chinese consumers by raising coal costs.
China took nearly a quarter of Australia's metallurgical coal exports in the year to June 2014, buying A$5.5 billion (HK$37 billion)of the coal used in steel mills. It also took A$3.5 billion worth of thermal coal, accounting for about a fifth of Australia's exports of coal used in power stations.
"This decision raises the stakes on the outcome of talks on a free trade agreement with China due to conclude next month," said Brendan Pearson, chief executive of the Minerals Council of Australia.
If the tariffs are not addressed in an Australia-China agreement, exports from BHP Billiton , Glencore, Rio Tinto, Anglo American and smaller producers, including China's own Yancoal Australia, will be heavily impacted.
