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| 20b Yuan in Oil Profit Taxes Redistributed |
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China has collected over 20 billion yuan (US$2.5 billion) in special taxes on the profits of its crude oil producers since March, said China's Vice Finance Minister Lou Jiwei. Of the total sum collected, 12 billion yuan (US$1.52 billion) was allocated to farmers as subsidies and the rest went to other public interest or welfare sectors such as forestry administration to offset their oil consumption. The ministry decided to levy the charge on profits of domestic crude oil producers, beginning March 26, in a bid to regulate the huge profits generated by the monopoly industry. Chinese oil producers now have to pay the central government 20 to 40 percent of profits if sale prices are more than US$40 a barrel. The proceeds are used to subsidize disadvantaged communities and redistributed to the public sector. Boosted by oil price hikes on the international market, China's oil producers saw their profits leap by 35.5 percent in the first nine months of this year. Meanwhile, China's National Development and Reform Commission, which regulates domestic prices for processed oil in line with international fluctuations, has kept prices relatively low, which has led to losses for oil processors and wastage by consumers. From January to September, China's processed oil industry suffered a net loss of 43.4 billion yuan (US$5.51 billion). (Xinhua News Agency November 7, 2006) |
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