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China mulls penalty tax on pollutiing businesses

(Xinhua)
Updated: 2009-06-05 17:05

China is considering levying a tax on polluting businesses to better protect the environment, a senior official said on Friday.

Zhang Lijun, vice minister of environmental protection, said collecting environmental taxes from polluting enterprises was one of the directions of the country's tax system reform.

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"It has been put on the agenda of the ministries of finance, environment protection and the state administration of taxation," Zhang told a press conference.

"We are jointly studying the issue, and when conditions are ripe, we'll launch the taxation system on polluting enterprises."

In one of its efforts, China has earmarked 210 billion yuan ($30.7 billion) for environmental protection from the government's 4-trillion-yuan stimulus package to boost domestic demand amid the global financial crisis, Zhang said.

The country has also enforced stricter penalties on companies that failed to reduce pollutant emissions, he said, which include heavy fines of more than 50 million yuan on a polluting power plant and administrative penalty on a delinquent county head in northern province of Hebei last year.

The efforts have helped improve the nation's environment, with obvious changes in some environmental quality indicators in 2008 -- including the decline of permanganate in surface water and the sulfur dioxide in the air of cities, he said.

Zhang admitted that air in a few cities remained "very polluted" and the problem of acid rain remained serious.

Surface water pollution in the country was still grim, and the environmental problems in rural areas became increasingly prominent, he warned.