China to reform fossil fuel subsidies
The final report of the US-China fossil fuel subsidy peer review process was released in September. This process, carried out under the G20 framework, took two years to complete and produced four separate reports. The joint contribution resulted in China’s first systematic cross-departmental review of fossil fuel subsidies.
China’s Self Report provides the outside world with valuable information on domestic energy subsidies and pricing mechanisms, as well as giving China a roadmap for fossil fuel subsidy reform in the near-term.
It is the first time the Chinese government has explicitly proposed a roadmap for energy subsidy reform, complete with timetables and directions. It represents an important step forward in guiding real action.
A boon for local government
Of the nine policies identified in China’s Self Report, four relate to exemptions or reductions in urban land use taxes. A major part of the next phase of subsidy reform will be the removal of these preferential tax policies.
This is good news for local government. China’s 1994 fiscal reform plan devolved powers over the collection and spending of urban land taxes to local government. The preferential taxes offered to big oil and gas companies have resulted in both a loss in revenue for local government, and environmental damage.
A good example of this is Dongying, in Shandong province on China’s east coast. Oil and gas giant Sinopec’s Shengli field alone paid 5.05 billion yuan (US$740 million) less in tax in 2013. Similarly, tax authorities in Shaanxi province, north-western China, calculated PetroChina’s Changqing field is exempt from 115 million yuan (US$16.9 million) in land taxes annually.
Local governments have been strongly opposed to these tax exemptions and have long-lobbied the Ministry of Finance and other central authorities to abolish them.
https://chinadialogue.net/article/show/single/en/9396-China-to-reform-fossil-fuel-subsidies-
The final report of the US-China fossil fuel subsidy peer review process was released in September. This process, carried out under the G20 framework, took two years to complete and produced four separate reports. The joint contribution resulted in China’s first systematic cross-departmental review of fossil fuel subsidies.
China’s Self Report provides the outside world with valuable information on domestic energy subsidies and pricing mechanisms, as well as giving China a roadmap for fossil fuel subsidy reform in the near-term.
It is the first time the Chinese government has explicitly proposed a roadmap for energy subsidy reform, complete with timetables and directions. It represents an important step forward in guiding real action.
A boon for local government
Of the nine policies identified in China’s Self Report, four relate to exemptions or reductions in urban land use taxes. A major part of the next phase of subsidy reform will be the removal of these preferential tax policies.
This is good news for local government. China’s 1994 fiscal reform plan devolved powers over the collection and spending of urban land taxes to local government. The preferential taxes offered to big oil and gas companies have resulted in both a loss in revenue for local government, and environmental damage.
A good example of this is Dongying, in Shandong province on China’s east coast. Oil and gas giant Sinopec’s Shengli field alone paid 5.05 billion yuan (US$740 million) less in tax in 2013. Similarly, tax authorities in Shaanxi province, north-western China, calculated PetroChina’s Changqing field is exempt from 115 million yuan (US$16.9 million) in land taxes annually.
Local governments have been strongly opposed to these tax exemptions and have long-lobbied the Ministry of Finance and other central authorities to abolish them.
https://chinadialogue.net/article/show/single/en/9396-China-to-reform-fossil-fuel-subsidies-