China replaced the environmental pollution fee with the environmental protection tax on Monday. The seriousness of the pollution, as indicated by the environmental watchdogs' monitoring statistics, will determine the rate of the tax. Beijing News commented on Monday:
For decades local governments have collected a fee from polluting enterprises. Designed to rein in the degradation of the environment, the pollution fee has failed to prevent environmental conditions from worsening.
It was not rare for enterprises to regard paying the fee, whose amount differs from place to place, as obtaining a permit to discharge pollutants.
And governments in some places connived in this practice, because the polluting companies are often the main source of tax revenue, and because if the pollution reaches a certain level the enterprises will be ordered to pay a fine.
One thing is certain, little, if any, of the money is used for environmental restoration.
The fee-to-tax reform can effectively plug these loopholes, as the tax is collected and spent at a higher-level than that of the local governments.
The tax will be included in the government budget, and put under scrutiny of the government discipline and auditing watchdogs, as well as the public. Not only the collection, but also the use of the money will become much more transparent and predictable.
And as the Environmental Protection Tax Law, which came into effect on Monday, prescribes, all of the revenue from the tax will be spent on environmental preservation and rehabilitation of the environment.
Hopefully, the new law can be strictly carried out to turn the new kind of tax into a reliable source of funds to support environmental and ecological health.