Following in Australia’s footsteps, China is now considering increasing its resources taxes.
China has taken steps towards imposing the tax, which the country sees as a way to slow the depletion of resources and the damage to the environment while rebalancing the nation’s economy.
The country previously had little to no tax on resources, with some analysts pointing to taxes as low as .03%.
Now China is beginning to revisit the possibility of taxing the mining industry within the country.
The China Daily, on 26 May, pointed to Australia’s Resources Super Profit Tax as an example of rebalancing the economy stating “A hint to this nation’s policymakers: if they are looking for guidelines to the long-awaited tax reform, take a good look at Australia’s latest plan to increase worker pension funds with a new tax on resource projects.”
Since then, China has implemented its first resource tax, a rate of 5% on petroleum in Xinjiang.
This tax is being floated as a litmus test for an eventual overall resources tax.
However, the Chinese resources industry has also followed the Australian mining industry in protesting the implementation of this tax.
In Western Australia, Prime Minister Kevin Rudd and Federal Treasurer Wayne Swan faced a rally from over 2000 people calling for an end to the RSPT.
The politicians were in WA to speak to miners one on one in a consultation of possible reforms to the tax, however, mining magnate Andrew Forrest claimed this was merely lip service to the industry.
While Rudd has stated that he is open to more consultation with the industry, the Government believed that a 40% tax was an appropriate levy.