Resource tax "ad valorem" to the whole country

The State Council officially promulgated the "Decision of the State Council on Amending the Provisional Regulations on the Resource Tax of the People's Republic of China" on the 11th and promoted it nationwide on November 1st, 2011. The annual tax increase to local governments may reach 60 billion yuan. After the increase in the oil and gas resources tax, the profits of development companies such as PetroChina and Sinopec will be reduced accordingly, and the corporate income tax paid will also be reduced.

After the reform of the resource tax price, or soon, it will promote the improvement of the operating mode of refined oil price adjustment and the adjustment of oil products.

The oil and gas tax rate is 5% to 10% of sales. State Council Prime Minister Wen Hao hosted the State Council Executive Meeting on September 21. The meeting concluded on the basis of summarizing the experience of reforming crude oil and natural gas resource tax pilots. The Regulations have been amended to increase the method of assessing the rate of ad valorem on the basis of the existing quota of resource tax, and adjust the rate of taxation on crude oil, natural gas and other items. In addition to petroleum and natural gas, taxes on other head resources such as coal are still subject to quotas.

The South Reporter learned from CNPC that, under the current resource tax system, China has implemented a method of quantity measurement. The amount of taxation is crude oil of 8-30 yuan/ton; natural gas is 2-15 yuan/1000 cubic meters. After the reform, the taxation basis of oil and natural gas was changed to the sales-based fixed rate, for example, crude oil is 5%-10% of sales; natural gas is 5%-10% of sales.

It is worth noting that this time the revision of the provisional regulations on resource tax, in addition to focusing on adjustments to the taxation of oil and gas resources and the tax rate, also adjusted the resource tax standards for coking coal and rare earth minerals.

Among them, the coking coal resource tax will be raised from 8 yuan/ton to 8-20 yuan/ton, and other coal taxes will be maintained at 0.3-5 yuan/ton. For nonferrous metal ore resources, rare earth mines will be listed separately. The tax amount was increased from the original 0.4-3 yuan/ton to 0.4-60 yuan/ton (consistent with the standard adjustment of the rare earth mineral resources tax in mid-March of this year), and other non-ferrous metal mines have not been adjusted.

In response, the Ministry of Finance stated that rare earths are important strategic resources. China's rare earth industry has the problems of extensive development methods, over-exploitation of resources, destruction of ecological environment, and serious waste of resources, which has seriously affected the safety of rare earth strategic resources in China and the sustained and healthy development of rare earth industries. In order to further rationalize the price-tax relationship between coking coal and rare earth resource products, better play the role of taxation regulation, promote the rational development and utilization of coking coal and rare earth resources, protect the ecological environment, and curb over-exploitation and waste of resources, according to the Provisional Regulations on Resource Taxes The provisions for the adjustment of the resource tax amount can be decided. The State Council has approved the standards for raising the tax amount of coking coal and rare earth resources since February 2007 and April 2011 respectively. In the revision of the provisional regulations on resource taxes, coking coal and rare earth ore were separately listed in the coal resources and non-ferrous metal ore resources, and the tax standards for these two important scarce resources were correspondingly raised, as well as for other coal resources and non-ferrous metal ore mines. The resource tax standard has not been adjusted.

Increased local fiscal revenue by about 60 billion yuan Since June 1, 2010, the first time the reform of oil and natural gas resources in Xinjiang was implemented, there have been constant speculations about when the reform will be promoted throughout the country. On December 1 of the same year, the pilot reform of the resource tax was extended to 12 western provinces and autonomous regions including Inner Mongolia, Gansu, Sichuan, Qinghai, Guizhou and Ningxia.

After answering a question from the reporters of the State Council Legislative Affairs Office, the Ministry of Finance, and the State Administration of Taxation regarding the reform of the local finance bureau, the resource tax is a local tax. According to the revised provisions of the provisional regulations on resource taxes and the tax rate, Local fiscal revenue will increase, and it is very favorable for enhancing local security, improving people's livelihood, and managing the environment.

Liu Wei, deputy dean of the Taxation Institute of Central University of Finance and Economics, said that according to the calculations of some experts in the industry, according to the tax rate of 5% to 10% of oil and natural gas, the annual increase in local fiscal revenue may reach 60 billion yuan.

Taking Xinjiang as an example: Taking Xinjiang, the earliest implementation of ad valorem pricing, as an example, according to the data disclosed by the Chinese government's government, in the first half of 2010, where no ad valorem assessment was conducted, the tax revenue of Xinjiang's oil and gas resources was only 371 million yuan. In the period from July to December 2010 when the implementation of ad valorem collection, the income from oil and gas resource taxes has reached 2.164 billion yuan.

After the increase in the oil and gas resources tax, the profits of oil and gas development enterprises will be reduced accordingly and the corporate income tax paid will be reduced.

For example, at present, CNPC’s oil and gas assets in the west are mainly Xinjiang's Xinjiang Oilfield, Tuha Oilfield, Tarim Oilfield and Changqing Oilfield, Qinghai Oilfield, Yumen Oilfield, and Southwest Oilfield, involving 3.617 million tons of crude oil and 61.5 billion cubic meters of oil and gas production. m natural gas, respectively, 31% and 96% of total oil and gas production.

Sinopec’s oil and gas assets in the west are mainly Tahe Oilfield, Xinjiang’s northwest branch, Xinjiang Chunguang Oilfield and Southwest Branch of the Henan Oilfield Branch (mainly P** Field), involving oil and gas production of 7.1 million tons of crude oil and 8.4 billion. Cubic meters of natural gas, respectively, 17% and 67% of the total oil and gas production. Yin Xiaofeng, an analyst at Galaxy Securities, believes that according to the actual comprehensive resource tax rates of PetroChina and Sinopec in the west, 4.8% and 3.5% will be used to calculate that 5% ad valorem will be implemented in the western region. PetroChina and Sinopec E PS (per share) will be about 4 Points and more than 1 minute. Taken together, estimating the 5% ad valorem of the oil and gas resource levy from the western region and extending it to the whole country will affect PetroChina and Sinopec's EPS by about 5 points and 6 points respectively.

Or improve the refined oil price adjustment operation resource tax price reform or will soon promote the improvement of refined oil price adjustment operation methods and adjust the affiliated oil.

It is worth mentioning that, since midnight on October 9, the National Development and Reform Commission has lowered the domestic gasoline and diesel prices by 300 yuan/ton, which is the first time that domestic refined oil prices have been reduced in 16 months. According to the person in charge of the National Development and Reform Commission, the country will further improve the refined oil pricing mechanism by focusing on shortening the price adjustment cycle, accelerating the frequency of price adjustments, improving the oil product price adjustment operation method, and adjusting the types of oil products to be affiliated within the current institutional framework.

Prior to this, Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, stated at the Summer Davos Forum on September 15 that the National Development and Reform Commission is conducting a study to advance a new mechanism for the formation of refined oil prices during the year.

In fact, over the past five years, the state's policy of introducing taxes and fees on the upper reaches of oil and gas has increased the burden on upstream oil and gas companies, often followed by favorable policies for the middle and lower reaches as a measure of compensation.

For example, on March 25, 2006, the Ministry of Finance issued the Measures for the Management of Special Oil Revenue, and on the following March 26 and May 24, the NDRC raised the price of refined oil twice. The ex-factory price of gasoline, for example, was set at 4,400 yuan/ton. To 4,700 yuan / ton and 5,200 yuan / ton. On May 25, 2010, the State Council promulgated the reform of the oil and gas resource tax. From June 1st onwards, a trial of 5% ad valorem was started from Xinjiang. Afterwards, on June 1st, the National Development and Reform Commission raised the ex-factory price of natural gas on land by 230 yuan/thousand. square.