China's National Development and Reform Commission said Thursday it has approved Shanxi province's plan to replace its volume-based duty on coal producers with a price-based resource tax.
The change is expected to boost taxation revenue in Shanxi, China's second-largest coal mining province, as the planned 5% resource tax will be five to seven times higher than the current volume-based duty, Beijing-based Dexin Yongming Consultation Co. said in a report Friday.
In the first seven months of 2012, coal-related taxation generated 66.8% of Shanxi's total tax revenue, up 2.7 percentage points year on year, the report said.
Shanxi mined 535.8 million mt of coal over January-July, up 10.3% year on year, according to Shanxi Coal Industry Bureau data.
The NDRC did not indicate when the province's new price-based tax would be introduced, but it is likely to be part of its current phase of economic reforms spanning 2011-2015, when related mechanisms are being set up.
China's central government announced plans in July 2010 to reform the taxation of coal, oil and natural gas in all of its western provinces, extending a 5% resource tax introduced in Xinjiang on crude oil and natural gas in June 2010 to other resources and other provinces.
Coal producers in China currently pay a duty of Yuan 8/mt ($1.26/mt) for coking coal and Yuan 2-4/mt for other coal products, including thermal coal.
