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Environmental Protection Tax Law of the People's Republic of China
(Draft for solicitation of comments)
Chapter I: General Provisions
Article 1: This Law is formulated in order to protect and improve the environment, to encourage energy conservation and emissions reduction by the society, and to promote the construction of ecological civilization.
Article 2: Enterprises, public institutions, and other producers or operators, who, within the territory of the People's Republic of China and other waters under its jurisdiction, directly discharge taxable pollutants into the environment, are the taxpayers of the environmental tax, and shall pay environmental taxes following the provisions of this Law.
Article 3: For purposes of this Law, "taxable pollutants" refer to atmospheric pollutants, water pollutants, solid wastes, construction site noise, industrial noise, and other pollutants.
Where enterprises, public institutions, and other producers or operators discharge taxable pollutants into urban sewage treatment plants or urban domestic waste treatment plants established according to law, environmental taxes are exempted.
Where enterprises, public institutions, and other producers or operators store or dispose of industrial solid wastes in facilities or sites that comply with environmental protection standards, environmental taxes are exempted.
Article 4: The items and rates of the environmental tax are to be executed according to the "Environmental Tax Items and Rates Table" appended to this Law.
When taking into full account the carrying capacity of the environment, the current status of pollution emission, the goal and the requirement of economic, social, and ecological development in their respective jurisdiction, the people's governments of provinces, autonomous regions, and municipalities can elevate as appropriate the applicable tax rates of taxable pollutants above the tax rate standards stipulated by the "Environmental Tax Items and Rates Chart", and file to the State Council for recording.
Chapter II: Taxation Basis
Article 5: The taxation bases of taxable pollutants are determined according to the following methods:
(1) [Those of] taxable atmospheric pollutants are determined by the pollution equivalent quantity converted from the amount of pollutant emission;
(2) [Those of] taxable water pollutants are determined by the pollution equivalent quantity converted from the amount of pollutant emission;
(3) [Those of] taxable solid waste are determined by the amount of solid waste discharge;
(4) [Those of] taxable building construction noise are determined by the construction area contracted by the construction units; [those of] industrial noise are determined by number of decibels exceeding the limits imposed by the State.
Article 6: The pollution equivalent numbers of atmospheric and water pollutants are calculated by dividing the emission amount (kg) of each pollutant by the specific pollution equivalent value (kg) of said pollutant. The specific pollution equivalent value of each taxable atmospheric and water pollutant is to be executed according to the "Taxable Pollutants and Equivalent Values Table" appended to this Law.
Article 7: The taxable atmospheric pollutants discharged from the same outlet are to be ranked in decreasing order of pollution equivalent numbers, and the top three pollutants are levied environmental taxes.
The taxable water pollutants discharged from the same outlet are divided into heavy metals and other pollutants and ranked in decreasing order of pollution equivalent numbers. Of the two groups, the top five items of heavy metal pollutants and the top three items of other pollutants are levied environmental taxes.
The people's governments of provinces, autonomous regions, and municipalities can, according the special needs of pollutant discharge reduction of their respective jurisdictions, increase the number of the taxable pollutant types from the same discharge outlet to be levied environmental taxes.
Article 8: The discharge amount of taxable atmospheric pollutants, water pollutants and solid waste, and the number of decibels of industrial noise are measured according to the following sorted methods:
(1) Where taxpayers install and use pollutant discharge automatic monitoring instruments that comply with relevant State provisions and monitoring standards, [the aforementioned items] are determined and measured according to the automatic monitoring data of the pollution sources;
(2) Where taxpayers have not installed or used pollution source automatic monitoring instruments, [the aforementioned items] are determined and measured according to the monitoring data that are issued by monitoring organizations and that comply with relevant State provisions and monitoring standards;
(3) Where taxpayers are not equipped to monitor, [the aforementioned items] are determined and calculated according to the pollution discharge coefficients or the materials accounting methods stipulated by the competent national authorities of environmental protection.
4) Where [the aforementioned items] cannot be determined according to the methods above, [they] are determined and calculated according to the sampling measurement methods stipulated by the competent authorities of environmental protection.
Chapter III: Tax Rate Payable
Article 9: The rates payable of environmental taxes are calculated according to the following methods:
(1) The rates payable on taxable atmospheric pollutants are equal to the pollution equivalent quantity multiplied by the specific rates applied;
(2) The rates payable on taxable water pollutants are equal to the pollution equivalent quantity multiplied by the specific rates applied;
(3) The rates payable on taxable solid waste equal to the discharge amount of solid waste multiplied by the specific rates applied;
(4) The rates payable of taxable construction site noise are equal to the construction area contracted by the construction units multiplied by the specific rates applied; the rates payable of industrial noise are the specific applicable rates corresponding to the number of decibels exceeding the standards stipulated by the State.
Article 10: The environmental tax is multiplied for those discharging the following taxable atmospheric and water pollutants:
(1) Where the concentration values of the pollutants discharged exceed the nationally or locally stipulated limits of pollutant discharge, or the amount of pollutants discharged is higher than the stipulated total discharge index, [the environmental tax] levied is twice the locally applied rate standards.
(2) Where the concentration values of the pollutants discharged exceed the nationally or locally stipulated limits of pollutant discharge, and at the same time the amount of pollutants discharged is higher than the stipulated total discharge index, [the environmental tax] levied is three times the locally applied rate standards.
Chapter IV: Tax Relief
Article 11: The following circumstances are exempted from environmental protection taxes:
(1) Taxable pollutants discharged by agricultural production (excluding large scale farming);
(2) Taxable pollutants discharged by mobile pollution sources such as motor vehicles, railway locomotives, off-road mobile machinery, ships, and aircrafts;
(3) Urban sewage treatment plants and urban domestic waste treatment plants discharging waste into the environment, not exceeding discharge standards stipulated by the State.
Article 12: Where the concentration values of the taxable atmospheric and water pollutants discharged by the taxpayers are under the nationally or locally stipulated pollutant discharge standards by over 50%, and do not exceed the pollutant total discharge control target, the people's governments of provinces, autonomous regions, and municipalities can within a certain duration reduce the environmental taxes levied by half.
Article 13: According to the special needs of social public interest or when facing major unexpected incidents, the State Council can formulate ad hoc preferential policies of environmental taxes, and file to the Standing Committee of the National People's Congress for recording.
Article 14: The (people's) governments at all levels shall encourage enterprises, public institutions, and other producers and operators to increase investment in environmental protection construction, and provide financial and policy support to the investments made by enterprises and public institutions in special pollution source automatic monitoring instruments.
Chapter V: Taxation Management
Article 15: Environmental taxes are collected and managed by taxation authorities in accordance with the "Taxation Collection and Management Law of the People's Republic of China" and relevant provisions of this Law.
In accordance with this Law and the provisions of relevant laws and regulations on environmental protection, the competent authorities of environmental protection carry out the responsibility of monitoring, supervising, reviewing and confirming taxable pollutants, and do well on the work of collecting and managing environmental protection taxes in collaboration with taxation authorities.
Article 16: The obligation to pay environmental protection taxes begins on the day the taxpayer discharged taxable pollutants.
Article 17: Taxpayers should declare and pay environmental protection taxes to the competent taxation authorities for the areas where taxable pollutants were discharged.
Article 18: Environmental protection taxes are levied on a monthly, quarterly or annual basis, determined by the competent tax authorities on the basis of actual circumstances. Where they cannot be periodically calculated and paid, single incident declaration and payment may be made.
Article 19: Taxpayers shall make tax payment declarations and pay over taxes to the competent taxation authorities within 15 days of tax payment deadline day. Taxpayers shall bear responsibility for the veracity and lawfulness of declarations.
Article 20: Separate administration is conducted of environmental protection taxes for taxpayers (polluters) under key monitoring and non-key monitoring.
The declaration statuses of the types, amount, etc. of the taxable pollutants discharged by taxpayers (polluters) under key monitoring are to be submitted to the competent authorities of environmental protection for review by the competent taxation authorities within five day of tax payment deadline day; the competent authorities of environmental protection are to issue the review opinions to the competent taxation authorities within 30 days of receiving the declaration documents.
The declaration documents of taxpayers (polluters) under non-key monitoring are to be checked and publicly announced by the competent taxation authorities jointly with the competent authorities of environmental protection.
Article 21: [After] integrating the tax payment declaration documents and the review opinions issued by environmental protection authorities, the competent taxation authorities adjust the taxpayers' tax rates payable in accordance with relevant provision of the "Taxation Collection and Management Law of the P.R.C.". Taxpayers [shall/can] attend to the adjustment of taxation items at the same time when they make tax declarations on the next occasion.
Where taxpayers have not adjusted taxation items as required, the competent taxation authorities shall handle [such situation] in accordance with relevant provisions of the "Taxation Collection and Management Law of the P.R.C.".
Article 22: Where the competent taxation authorities find that the following circumstances apply to taxpayers, [they] can ask the competent authorities of environmental protection to review the pollution discharge statuses of taxpayers; and the competent authorities of environmental protection [shall] issue their review opinions to the taxation authorities within 30 days of receiving their data.
(1) Where the taxation authorities find during taxation collection and management that the taxpayers have not declared the discharge statuses of taxable pollutants within the required limit, or that the declared data are obviously untrue;
(2) Where the taxation authorities have reasons to believe that the taxpayers have conducted acts such as evading tax obligations.
Article 23: The competent authorities of environmental protection shall, based on the taxation authorities' demands in the collection and management work, promptly deliver to them information such as the list of polluting establishments and [their] pollution data, the monitoring data of polluting establishments' pollution discharge, review and confirmation information and pollution discharge license information, polluting establishments' violation of environmental laws and their statuses of administrative penalties.
Taxation authorities shall promptly send information on the environmental protection tax, such as taxpayers' emissions declarations, paid taxes, levy multipliers or tax reductions and owed taxes and risk concerns to the relevant departments for environmental protection.
Article 24: Where taxpayers engaging in oceanographic engineering discharge atmospheric pollutants, water pollutants, or solid waste into waters under the jurisdiction of the People's Republic of China, declare and pay environmental protection taxes, referring to relevant provisions of this Law. The specific items of taxation declaration are to be stipulated by the competent taxation authority under the State Council in consultation with the competent authority of the ocean.
Article 25: People's Governments of provinces, autonomous regions and directly governed municipalities may formulate specific measures for the administration of the environmental protection tax on the basis of the provisions of this law and the actual situation.
Local people's governments at or above the country level shall, according to the provisions of this Law, establish working mechanisms of labor division and cooperation involving taxation authorities, competent authorities of environmental protection and other relevant units, strengthen the collection and management of environmental protection taxes [to] ensure that the tax payments are turned in to the Treasury in full amount and without delay.
Article 26: Where taxpayers fail to declare and pay over taxes to taxations authorities, or the competent authorities of taxation and environmental protection and the staff thereof violate provisions of this Law and cause major damages, [they] are to be penalized according the provisions of the "Taxation Collection and Management Law of the P.R.C.", the "Environmental Protection Law of the P.R.C." and other relevant laws and regulations.
Chapter VI: Supplementary Provisions
Article 27: For purposes of this Law, taxpayers (polluters) under key monitoring refer to taxpayers from key polluting industries such as thermal power generation, steel, cement, aluminum electrolysis, coal, metallurgy, construction materials, mining, chemistry, petrochemistry, pharmaceuticals, light industries (brewing, paper making, fermentation, sugar manufacturing, vegetable oil processing), textile, and tanning, and enterprises under key monitoring from other polluting industries.
The State Council and people's governments of provinces, autonomous regions, and municipalities can, according to the needs of environmental protection, increase (adjust) the types of key polluting industries.
Article 28: After this law takes effect, those against whom an environmental protection tax is levied in accordance with this law, will no longer have an emissions fee collected. Costs originally scheduled to be paid from emissions fees are rescheduled in the budget.
Article 29: The State Council formulates implementation regulations on the basis of this law.
Article 30: This Law takes effect on ___,______ 20__.
Appendix 1: Environmental Tax Items and Rates Table
Appendix 2: Taxable Pollutants and Equivalent Values Table
Appendix 1: Environmental Tax Items and Rates Table
|Taxable items||Tax unit||Amount Taxed|
|Atmospheric pollutants||per pollution equivalent||1.2 Yuan|
|Water pollutants||per pollution equivalent||1.4 Yuan|
|Solid waste||Metallurgical slag||per ton||25 Yuan|
|Coal Ash||per ton||30 Yuan|
|Blast furnace slag||per ton||25 Yuan|
|Coal gangue||per ton||5 Yuan|
|Tailings||per ton||15 Yuan|
|Other solid wastes (including semi-solid and liquid waste)||per ton||25 Yuan|
|Noise pollution||Construction site noise||Per square meter of construction area||3 Yuan|
|Industrial noise||1 decibel above standard||350 Yuan per month|
|2 decibels above the standard||440 Yuan/Month|
|3 decibels above the standard||550 Yuan/Month|
|4 decibels above the standard||700 Yuan per month|
|5 decibels above the standard||880 Yuan/Month|
|6 decibels above the standard||1100 Yuan/Month|
|7 decibels above the standard||1400 Yuan per month|
|8 decibels above the standard||1760 Yuan/Month|
|9 decibels above the standard||2200 Yuan/Month|
|10 decibels above the standard||2800 Yuan per month|
|1 decibels above the standard||3250 Yuan/Month|
|12 decibels above the standard||4400 Yuan/Month|
|13 decibels above the standard||5600 Yuan per month|
|14 decibels above the standard||7040 Yuan/Month|
|15 decibels above the standard||8800 Yuan/Month|
|18 decibels above the standard||11200 Yuan per month|
Appendix Table 2:
Taxable Pollutants and Equivalent Values Table
I. Pollution Equivalent Values for Category I Water Pollutants
|Pollutants||Pollution equivalent values (kg)|
|1. Total mercury||0.0005|
|2. Total cadmium||0.005|
|3. Total chromium||0.04|
|4. Hexavalent chromium||0.02|
|5. Total arsenic||0.02|
|6. Total lead||0.025|
|7. Total nickel||0.025|
|9. Total beryllium||0.01|
|10. Total silver||0.02|
II. Pollution Equivalent Values for Category II Water Pollutants
|Pollutants||Pollution equivalent values (kg)|
|11. Suspended solids (SS)||4|
|12. Biochemical oxygen demand (BOD5)||0.5|
|13. Chemical oxygen demand (COD)||1|
|14. Total organic carbon (TOC)||0.49|
|15. Petrolium and derivatives||0.1|
|16. Animal and vegetable oils||0.16|
|17. Volatile phenols||0.08|
|18. Total cyanides||0.05|
|20. Ammonia nitrogen||0.8|
|25. Linear Alkylbenzene Sulfonate (LAS)||0.2|
|26. Total copper||0.1|
|27. Total zinc||0.2|
|28. Total manganese||0.2|
|29. Color developing reagent (CD-2)||0.2|
|30. Total phosphorus||0.25|
|31. Elemental phosphorus (measured in P)||0.05|
|32. Organophosphorus pesticides (measured in P)||0.05|
|37. pentachlorophenol sodium pentachlorophenate (in terms of PCP)||0.25|
|40. Carbon tetrachloride||0.04|
|58. fat-dibutyl phthalate||0.02|
|59. dioctyl phthalate||0.02|
|61. Total selenium||0.02|
Explanation: 1. The basis for the classification of Class 1 and 2 pollutants is the "Integrated Wastewater Discharge Standard " (GB8978-1996).
2. Only one item is levied environmental protection taxes among the chemical oxygen demand (COD), the biochemical oxygen demand (BOD5), and the total organic carbon (TOC) from a single discharge outlet.
III. Pollution Equivalent Values for pH Values, Color, Coliform Group Numbers, and the Amount of Residual Chlorine
|Pollutants||Pollution equivalent values|
|1. pH values|
|2. Color||5 tons of water · unit|
|3. Coliform group numbers (above standards)||3.3 tons of sewage|
|4. Amount of residual chlorine (hospital wastewater disinfected with chlorine)||3.3 tons of sewage|
Explanation: 1. Taxes are levied either on coliform group numbers or on the amount of residual chlorine.
2. PH 5-6 refers to [a pH value] greater than or equal to 5 and less than 6; PH 9-10 refers [a pH value] greater than 9 and less than or equal to 10, and so forth.
IV. Pollution Equivalent Values for Livestock Husbandry, Small Business, and the Tertiary Industry
|Type||Pollution equivalent values|
|Livestock farms||1. Cattle||0.1 head|
|2. Pigs||1 head|
|3. Chicken, ducks and other poultry||30 birds|
|4. Small businesses||1.8 tons of sewage|
|5. Food and beverage, entertainment, and service industries||0.5 tons of sewage|
|6. Hospitals||Disinfected||0.14 beds|
|2.8 tons of sewage|
|Not disinfected||0.07 beds|
|1.4 tons of sewage|
Explanation:1. This chart only applies to the calculation of pollution equivalent numbers of small polluters such as livestock husbandry industry, small businesses, and the tertiary industry, for which actual monitoring or materials accounting cannot be conducted.
2. Tax is only levied against livestock breeding farms with stock of more than 50 heads of cattle, 500 pigs, or 5000 chicken or ducks.
3. Where there are more than 20 beds in a hospital, follow this chart to calculate the pollution equivalent values.
V. Pollutant Equivalent Values for Atmospheric Pollutants
|Pollutants||Pollution equivalent values (kg)|
|2. Nitrogen oxides||0.95|
|5. Hydrogen chloride||10.75|
|7. Hydrogen cyanide||0.005|
|8. Sulfuric Acid Mist||0.6|
|9. Chromic Acid Mist||0.0007|
|10. Mercury and its compounds||0.0001|
|11. General dust||4|
|12. Asbestos dust||0.53|
|13. Glass wool dust||2.13|
|14. Carbon black dust||0.59|
|15. Lead and its compounds||0.02|
|16. Cadmium and its compounds||0.03|
|17. Beryllium and its compounds||0.0004|
|18. Nickel and its compounds||0.13|
|19. Tin and its compounds||0.27|
|24. benzo (a) pyrene||0.000002|
|30. asphalt smoke||0.19|
|37. hydrogen sulfide||0.29|
|40. methyl mercaptan||0.04|
|41. methyl sulfide||0.28|
|42. dimethyl disulfide||0.28|
|44. carbon disulfide||20|