State Administration of Taxation to Levy New Fuel Oil Tax

State Administration of Taxation's "2007 taxation working guidelines" was unveiled recently, while discussion about reformation on fuel oil tax was listed on the government's work agenda.

Sources from State Administration of Taxation and Ministry of Finance People's Republic of China said that the implementation of fuel tax was still on schedule. Experts participated in the discussion predict that the taxation might put into effect in 2007 as early as next year.

The feasibility of levying a fuel oil tax has been discussed for more than ten years, but its implementation was put off for many reasons.

An insider from Commission of Legal Affairs of the Standing Committee of the National People's Congress and the Legal Office of State Council told the media that relative legal department will modify and improve the guidelines according to the changing overall situations while carrying out other relative plans. Meantime the oil price fluctuations in international market will be closely watched so they could made necessary suggestions to the State Council. According to the insider, the State Administration of Taxation has worked out relative drafts regarding the fuel tax, including instant implementation of fuel taxation draft, the operating measures on fuel taxation draft, etc.

Though the Finance Ministry and State Administration of Taxation didn't give details on how it would be enforced, experts on taxation forecast reformation on traffic and vehicles might be included, and the taxation rate should also be readjusted. 
An Tifu, Vice Chairman of Chinese Taxation Institute and Chairman of School of Finance Renmin University of China, said the fluctuation of the fuel price was the main reason for the delay of the taxation.