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Upcoming environmental protection tax to push manufacturers to upgrade

The Environmental Protection Tax Law of China will come into force from January 1, 2018.

Under the law, the environmental protection tax paid for every air pollution equivalent can be from the minimum 1.2 yuan to the maximum 12 yuan, while that paid for every water pollution equivalent can be from 1.4 yuan to 14 yuan.

Local legislatives have set their own standards within the scope of the Law.

The tire manufacturers and their upstream suppliers and downstream clients, which discharge pollutants quite often, are very sensitive about the environmental protection tax.

Beijing, Tianjin, Hebei, Shandong adopt the highest tax rate

Beijing adopts the maximum standards of environmental protection tax. Companies in Beijing should pay 12 yuan tax for each air pollution equivalent, and 14 yuan tax for each water pollution equivalent.

Hebei province adopts three grades of environmental protection tax: eight times the minimum standard, five times the minimum standard and four times the minimum standard.

Under the highest grade, companies in Hebei should pay 9.6 yuan per air pollution equivalent and 11.2 yuan per water pollution equivalent.

For other pollutants, companies in Hebei should pay four times the minimum standard.

Shandong province will levy 6 yuan for per sulfur dioxide equivalent and oxinitride equivalent, and 1.2 yuan for every equivalent of other kinds of air pollution.

Other provinces adopt minimum or middle-level tax rates

Provinces of Liaoning, Jilin, Anhui, Fujian, Jiangxi, Shaanxi, Gansu, Qinghai and Ningxia Hui Autonomous Region and Xinjiang Uygur Autonomous Region adopt the lowest level of environmental protection tax, 1.2 yuan for air pollution and 1.4 yuan for water pollution.

Provinces of Zhejiang, Hubei, Hunan, Guangdong, Guizhou and Yunnan and Guangxi Zhuang Autonomous Region apply to a tax slightly higher than the minimum requirement.

For instance, companies in Yunnan province will pay the lowest level of environmental protection tax in 2018, while they should pay 2.8 yuan tax per air pollution equivalent and 3.5 yuan per water pollution equivalent in 2019.

Jiangsu province requires 4.8 yuan for each air pollution equivalent, and 5.6 yuan for water. Sichuan province requires 3.9 yuan and 2.8 yuan, respectively.

The levy of environmental protection tax releases an explicit signal to the manufacturers: they must control and reduce discharge of contaminants and pollutants and protect and improve the ecological environment.

The move will add another “leash” to the manufacturers, while it will also push them to transform and upgrade, said an unnamed entrepreneur from Shandong province.

Tireworld