TAX NEWS - JUNE 2010

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China Tax: China launches new resources tax in Xinjiang

02 June 2022 -- China said Wednesday it has introduced a resources tax in the energy-rich Xinjiang region as part of a drive to boost stability in the restive area by lifting prosperity.

Energy producers in the northwestern region have been ordered to pay a five-percent levy on the sales value of crude oil and natural gas, the Ministry of Finance said on its website. The tax was effective from Tuesday.

China previously imposed a volume tax of up to 30 yuan (4.4 dollars) on each tonne of crude sold and up to 15 yuan on every 1,000 cubic metres (35,000 cubic feet) of natural gas sold.

It was not clear in the statement if the volume tax was still in place.

The reform of the resources tax regime, which is aimed at saving energy and cutting emissions, is expected to be rolled out nationwide, according to previous media reports.

The tax -- expected to boost government coffers by billions of yuan every year -- was launched in Xinjiang as part of China's plan to rev up economic growth in the region after nearly 200 people were killed in unrest last year.

Last July, violence erupted in the region's capital Urumqi, pitting mainly Muslim Uighurs against members of China's dominant Han majority. About 1,700 people were injured in the unrest, the worst in China for decades.

Beijing blamed the turmoil on separatist and extremist forces.

Earlier this month, state media said the government would pour around 10 billion yuan in economic aid into the region from 2011 in a bid to raise living standards of the Uighur minority.

Separately, central bank governor Zhou Xiaochuan said Tuesday the bank will expand a trial for yuan cross-border trade settlements to Xinjiang, which borders eight countries, to support regional development, the Xinhua news agency said.
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