New draft ecological tax aims to cut emissions

China's first draft environmental protection tax law, which is expected to cut pollutants emissions, has been submitted to the country's top legislative body.

It is aimed at protecting the environment and improving ecological construction by promoting energy conservation and reducing emissions, Finance Minister Lou Jiwei told the bimonthly session of the National People's Congress Standing Committee on Monday morning.

The draft calls for taxes to be targeted at individuals or companies that pollute the air, water or soil, or emit noise pollution, while lower tax standards will follow on from existing fees for pollutant discharge, Lou said.

Companies directly discharging pollutants — especially those in major polluting industries such as thermal power, iron and steel, cement, coal, electrolytic aluminum, metallurgy, mining, chemical engineering, pharmaceutical and textiles — will be subject to the new tax.

But it will not target polluters in the agricultural sector or mobile sources of pollution such as vehicles and airplanes, while sewage processing plants and household waste will also be excluded.

Meanwhile, companies that successfully reduce their level of pollutants emission will be subject to reduced levels of tax.

Between 2003 and 2015, China collected more than 211.6 billion yuan ($31.7 billion) in fees for pollutant discharge.

Lou said the fees had been effective "in preventing and controlling environmental pollution", but were easily meddled with by local-level governments, making it necessary to implement a law on pollutant discharge.

Some experts have spoken highly of the draft law and the potential it holds to better regulate fees on pollutants emission.

If the first reading and following reviews go well, it could become law by the end of the year, according to the Economic Information Daily.