China to Introduce Fuel Tax from the 1st of January 2009
[2009-02-04 14:51:33]
In accordance with the requirement of the State Council to implement fuel price and tax reform, the Ministry of Finance and the State Administration of Taxation issued a notice to introduce a fuel tax from the 1st of January, 2009. The main content of the Notice includes the following:
Firstly, increase the unit tax rate of fuel excise tax. The rate for petrol, naphtha, solvent oil, lubricating oil will be increased from 0.2 yuan per litre to 1 yuan per litre while the rate for diesel, aviation kerosene and fuel oil will be increased from 0.1 yuan per litre to 0.8 yuan per litre.
Firstly, increase the unit tax rate of fuel excise tax. The rate for petrol, naphtha, solvent oil, lubricating oil will be increased from 0.2 yuan per litre to 1 yuan per litre while the rate for diesel, aviation kerosene and fuel oil will be increased from 0.1 yuan per litre to 0.8 yuan per litre.
Secondly, adjust the tax policy for fuel destined for special purposes. Excise tax on imported naphtha will be re-instated. Excise tax on aviation kerosene will be temporarily postponed. Ethanol gasoline made from outsourcing or commission processed recovered petrol that has previously been taxed will be exempted from the excise tax. Ethanol gasoline made from self-produced petrol will be taxed based on the declared amount of petrol used for its production. As for outsourcing or commission processed recovered petrol or diesel which are used in the subsequent production of methanol petrol or bio-diesel, deduction can be made to take into account the amount of excise tax already levied on the raw materials.
Domestically produced naphtha used as raw materials for the production of ethylene and alkyl aromatics will be exempted from the excise tax until the 31st of December, 2010 while imported naphtha used for the same purpose will have the excise tax refunded.
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