Report Predicts China Planning to Increase Mining Resource Tax

Interfax-China reported in October that China intends to further increase the mining resource tax in the near future to better reflect high profits and promote sustainable development in the mineral resource sector. “The Ministry of Finance will further reform and improve the existing resource tax system. The current level of the resource tax is still too low compared to the high profits earned by domestic mining companies. During the next step of reform, we will increase the resource tax,” Su Ming, executive director of Fiscal Science Institute under Ministry of Finance, said.

Su further commented that the MOF is looking into reforming the resource tax to more accurately reflect the market price of mineral ores, and will replace the current system that only taxes ore output. High returns on investment in the mineral resource mining sector have led to excessive investment growth and resource waste problems.

China’s central government is also considering expanding the paid utilization system to cover the metal mining industry. The policy is currently being trialed for the coal mining industry, Su said.

The paid utilization system requires companies to pay a non-refundable fee for mining rights, regardless of whether mining rights have already been obtained, or are still under application. The system is currently being tested in eight regions of China, including Shanxi, Inner Mongolia and Heilongjiang.

China increased the mining resource tax on lead, zinc, copper and tungsten mines on August 1 in response to high profits from soaring domestic metals prices. The tax consists of five tax brackets for lead and zinc mines, ranging from RMB 10 ($1.33) per ton of ore to RMB 20 ($2.66) per ton of ore, with copper mines levied at between RMB 5 ($0.67) per ton of ore to RMB 7 ($0.93) per ton.

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