North China's Shanxi province will impose eight-percent coal resource tax starting from Jan 1, 2015, according to the provincial local tax bureau.
Since December 1, 2014, China has carried out coal resource tax reform featuring ad valorem collection. The central government scrapped related charges and each province was allowed to make their own tax rate from two to ten percent. China's three main coal production bases, including Shanxi, Shaanxi and Inner Mongolia had focused on eliminating irregular charges over a period of six months before the national coal tax reform, which helped Shanxi's coal enterprises cut costs by 17 billion yuan ($2.73 billion).
The tax reform in Shanxi revoked mineral resources compensation fee, coal price regulation fund, and coal sustainable development fund, all of which amounted to far more than eight percent in tax rate, along with a specific duty charge.
An official from the Shanxi bureau said that the local tax reform strengthened linkage between resource tax revenue and resource price and made it possible to create a more flexible regulatory mechanism, stronger regulatory function, and much increased revenues.
