SHANGHAI, May 12 (SMM) – China is going to boost resource tax reform from July 1, 2016, according to a statement issued by the Ministry of Finance and the State Administration of Taxation on May 10.
In accordance with the statement, resource tax will be levied based on price instead of quantity, and the new rate on iron ore will range from 1-6 per cent based on classes of mines, depending on mining methods (open-pit or underground), ore types (lumps or concentrates) and ROM grades.
“Tax burden for domestic iron mines is expected to be reduced considerably after the latest reform, as iron ore prices will not turn around in the short term,” SMM iron ore analyst foresees.
Before the latest reform, resource tax averaged 18.7 yuan per tonne at 300 mines in SMM’s survey sample. After the reform, the tax will be 26.4 yuan per tonne based on current ore price of 440 yuan per tonne in Qian’an, Tangshan (wet basis, excluding tax) and maximum rate of 6 per cent, and 4.4 yuan per tonne on minimum tax rate of 1 per cent, leaving average resource tax at 15.4 per tonne, SMM calculates.
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