China to annouce revamped resource tax soon-analyst
BEIJING, March 25 |
BEIJING, March 25 (Reuters) - China may announce in a week's time a long-awaited revamp of its resource tax that will shift taxation of coal, metals, oil and gas extraction to revenues rather than volume, according to a local analyst.
"It should be announced around end of March, or by latest April," Sinolink Securities wrote in a research note.
The change to the resource tax, which the country has been looking to revamp since 2006, will likely boost production costs of coal miners like Shenhua Energy (1088.HK), copper producers such as Jiangxi Copper (0358.HK) and alumium makers like Chalco (2600.HK) (601600.SS).
It would also cut into revenues of the country's oil trio PetroChina (0857.HK), Sinopec Corp (0386.HK) and CNOOC Ltd (0883.HK), but analysts have previously said they expect Beijing to also revamp a windfall tax on crude oil that will partly offset the impact from resource tax change.
For a table of China's existing resource tax details: [ID:nTOE62O06G]
A government source said the resource tax plan had been submitted early this year for approval by the State Council, or China's Cabinet, adding that changes would only apply to "several types of resources", but declined to elaborate.
Under the current scheme, the government charges a 14-30 yuan ($2-$4.4) per tonne tax on crude oil, versus prevailing crude prices CLc1 around $80 a barrel, or 4,000 yuan a tonne.
The gas levy is half that of crude.
The current tax on coal was 2-4 yuan per tonne, and coking coal 8 yuan, compared to spot prices for thermal coal at about 730 yuan per tonne.
A 3-5 percent tax could reduce the net income of oil firms by up to 10 percent, though the impact of CNOOC will be smaller as the offshore oil and gas specialist is shielded by production sharing agreements, Bernstein Research wrote in February.
The resource tax, which makes up less than one percent of China's total fiscal revenue, ends up mostly in local governments' coffer. (Reporting by Chen Aizhu and Eadie Chen in Beijing, Polly Yam in Hong Kong and Rujun Shen in Shanghai; Editing by Michael Urquhart)
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