After research by the Ministry of Finance and other relevant departments, China hopes to start levying a carbon tax during the 12th Five-Year Plan period (2011-2015), using carbon dioxide emissions as the basis for taxation, with 2012 being the optimal time to launch the tax.
A research team from China's National Development and Reform Commission and the Ministry of Finance recently completed a special report on "The Framework Design of China's Carbon Tax System" after conducting investigations and research.
The *Economic Information Daily* reports that the report analyzes the necessity and feasibility of levying a carbon tax in China, proposes the basic objectives and principles for such a tax, outlines the basic content of the carbon tax system, and specifically proposes the implementation framework and related supporting measures. It is understood that the Ministry of Environmental Protection, the Ministry of Finance, and the State Administration of Taxation have already completed their plans for environmental taxes. A source close to the Ministry of Environmental Protection said that China's carbon tax is essentially a change from the current resource tax to a carbon tax, "currently only 2%, we will increase the tax rate."
Currently, five Nordic countries—Denmark, Finland, the Netherlands, Norway, and Sweden—have implemented carbon taxes or energy taxes, and France is expected to follow suit this year. Furthermore, since carbon dioxide is produced by the consumption of fossil fuels, the carbon tax should be levied on businesses producing coal, natural gas, and refined oil products—in other words, entities and individuals that directly emit carbon dioxide into the environment.
Regarding the allocation of carbon tax, experts say that carbon tax should not be a local tax, but given that China's current local tax revenue is too low, they suggest that carbon tax be a shared tax between the central and local governments, with a 7:3 ratio between the two.
– Reference source: Yahoo! Taiwan, 2010-05-11
