BEIJING, Oct. 11 (UPI) -- The Chinese Cabinet, seeking to cut consumption, says it will extend its regional tax on oil and natural gas to the entire country.
The widening of the experimental resource tax will be effective Nov. 1 and is part of an effort to encourage conservation and limit environmental damage, the Cabinet said.
Under the experimental tax measure introduced in some of the regions a year ago, oil and natural gas are currently taxed at 5 percent based on output. Under the new regulation, which would be based sales value, the taxes could go up to 10 percent of the sales value, the official Xinhua news agency reported.
The new regulations would expand the list of taxable resources from crude oil and natural gas to coal, rare earth, salt and metal, Xinhua said.
The new move appears to indicate less concern for inflation, The Wall Street Journal reported. Thus far, the government had been careful to go slow on taxes as that would raise costs and add to inflationary pressures.
The report said Moody's Investors Service had previously estimated extending the oil and gas taxes nationwide would together cost China's three major state-owned energy companies about $6.9 billion a year.
The new measure also would help provide cash to local governments experiencing financial difficulties.
