The time is not yet ripe for China to introduce an environment tax or a waste-discharge tax.
An unnamed official told Xinhua yesterday that the Ministry of Finance would use fiscal policies to encourage environmental protection, but new taxes now would present practical difficulties and it lacked the necessary expertise and manpower to introduce them.
He told Xinhua that a waste-discharge tax would require a large number of professional assessors and such revenue collection methods did not match the self-declaration principle which forms the basis of China's tax system.
'Businesses which discharge waste will try to under-report their waste discharge in order to pay less taxes and it would be difficult for tax authorities to find enough evidence of tax evasion by these companies,' the official said.
'This will create loopholes to tax collection ... and create a negative effect on the integrity of our tax laws.'
He also ruled out the possibility of an environment tax, saying the central government needed to take into account the interests of regional authorities as well as the tax burden on firms.