Page 125 - Low Carbon Development in China and India
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Moreover, some countries have adopted tax deduction or exemption
measures for some taxes (including value added and income taxes) for
green/low carbon projects. France is an example. In recent years, the
country has offered value added tax deduction or exemption policies
for the use of and investment in distributed PV power generation. We
propose that China further expands the coverage of such tax deduction
and exemption and incorporates more low carbon city development
projects into such coverage, so as to effectively lower the cost of
investment. Also, considering land tax, in contrast to the property tax
using the price of housing property as the tax base, the land tax uses
the price of land as the tax rate. However, given its limited scope of
application and relatively more complicated management, it does not
fit in well with the national conditions of China at the moment, and we
will not make detailed analyses on this tax herein.
Finally, the newly created taxes related to low carbon development
are also an important source of fund for the local governments. At
present, some developed countries—e.g., Finland, Switzerland, and
the UK—are imposing a certain percentage of carbon dioxide emission
tax (carbon tax) on carbon dioxide emission from fossil fuels. China
is also actively studying and preparing the levying of the carbon
tax; the environment tax has already been written into the Twelfth
Five-Year Plan of China and will be put into effect in due course. In
addition, China can take the financial trading tax,5 in combination
with the existing financial product taxes, as a medium-to-long-term
policy option, and use a part of the revenue from this tax to provide
additional funds for the low carbon development of Chinese cities.
At present, some European countries—e.g., France, Poland, Sweden,
Finland, and Belgium, etc.—have already put the financial trading tax
in place and used part of their revenues from this tax for the purpose
of low carbon economic development. The financial trading tax is not
only beneficial to the stability of financial markets and the reduction
of malicious speculation behaviours; it is also capable of providing
sufficient funds for government budgets.
In addition to studying the types of taxes for the purpose of
providing funds for local governments in the low carbon growth area,
we can also study the revenue from the taxes shared by the central
and local governments, with the aim of adjusting the distribution
5 The financial trading tax was first proposed by James Tobin, a Nobel Prize
winner for economics in 1972. It is therefore also dubbed as the ‘Tobin tax’. It
refers to the globally uniform trading tax imposed on the spot foreign exchanges.
The forms and targets of the financial trading tax vary from country to country.
90 Low Carbon Development in China and India
measures for some taxes (including value added and income taxes) for
green/low carbon projects. France is an example. In recent years, the
country has offered value added tax deduction or exemption policies
for the use of and investment in distributed PV power generation. We
propose that China further expands the coverage of such tax deduction
and exemption and incorporates more low carbon city development
projects into such coverage, so as to effectively lower the cost of
investment. Also, considering land tax, in contrast to the property tax
using the price of housing property as the tax base, the land tax uses
the price of land as the tax rate. However, given its limited scope of
application and relatively more complicated management, it does not
fit in well with the national conditions of China at the moment, and we
will not make detailed analyses on this tax herein.
Finally, the newly created taxes related to low carbon development
are also an important source of fund for the local governments. At
present, some developed countries—e.g., Finland, Switzerland, and
the UK—are imposing a certain percentage of carbon dioxide emission
tax (carbon tax) on carbon dioxide emission from fossil fuels. China
is also actively studying and preparing the levying of the carbon
tax; the environment tax has already been written into the Twelfth
Five-Year Plan of China and will be put into effect in due course. In
addition, China can take the financial trading tax,5 in combination
with the existing financial product taxes, as a medium-to-long-term
policy option, and use a part of the revenue from this tax to provide
additional funds for the low carbon development of Chinese cities.
At present, some European countries—e.g., France, Poland, Sweden,
Finland, and Belgium, etc.—have already put the financial trading tax
in place and used part of their revenues from this tax for the purpose
of low carbon economic development. The financial trading tax is not
only beneficial to the stability of financial markets and the reduction
of malicious speculation behaviours; it is also capable of providing
sufficient funds for government budgets.
In addition to studying the types of taxes for the purpose of
providing funds for local governments in the low carbon growth area,
we can also study the revenue from the taxes shared by the central
and local governments, with the aim of adjusting the distribution
5 The financial trading tax was first proposed by James Tobin, a Nobel Prize
winner for economics in 1972. It is therefore also dubbed as the ‘Tobin tax’. It
refers to the globally uniform trading tax imposed on the spot foreign exchanges.
The forms and targets of the financial trading tax vary from country to country.
90 Low Carbon Development in China and India
