Comparation And Design Research On Taxation Systems For Mineral & Resources Among China And Foreign Countries

In recent years, due to the constant restructuring of the world economy and the new normal period for the Chinese economy, the global mining industry has displayed a significant downward trend since 3 yaers ago and now it still hits a historical low. Nonetheless, the periodic depression of the mining industry indicates a good opportunity to the growth transformation and structure upgrading for the mineral resources development and utilization In 2015, Chinese economy maintained a GDP growth of 6.9% with several good key economic indicators, which show a sound and stavle growth of the economy and an important contribution to the World economy. However, the reform and transforming will be still a continuous strend for Cinese economy because of a complicated climate. On one hand, a series of economic revitalization action plan including “One Belt and One Road” project, “Asian Infrastructure Investment Bank”, Silk Road Fund and etc. have been put forwarded by China, and China’s Central Government encourages more banks and financial institutes to support Chinese enterprises going global and doing business overseas, particularly to excellent manufacturer’s capacity relocation abroad and mining company’s investment overseas, one the other hand, the governments at various level issue favourable policies and measures to promote the restructuring and upgrading of the mining industry, and the new round of the taxation reform on oil and natural gas(initiated in Nov. of 2011), coal(initiated in Dec. of 2014), rare earch and iron ore(initiated in May of 2015) are continuously deepening and broadening. Under this macro circumstances, it will bring an important significance and reference for China to boost his mineral and resources taxation system reform by means of comparing and analysing various taxation systems on the resources development and utilisation in the developed mining counties, and finding out and improving the shortage and questions through learning from experiences and lessons of Chinese enterprise who runs business abroad. Meanwhile, it will be very helpful and useful to establish a competitive and sustainable mineral and resources taxation system so as to support and maintain a sustained rapid and sound development for China’s economy and for Chinese mining industry as well.Based on the status of Chinese mining industry’s restructuring and upgrading, and Chinese resources taxation system’s new round of the reform, combined the business operation experience on coal and potash development in Australia and Canada by Yankuang Group Co., Ltd.(“Yanzhou Coal Mining Co.”) who went global much earlier and listed in four stock exchanges including New York, Shang Hai, Hong Kong and Sydney, this paper compares and researches systematically the mineral and resources’ development and its taxation system among Canada, Australia and China by taking research methods of literature review, empirical study, AHP and fuzzy comprehensive evaluation, qualitative and quantitive analysis, analysis based on the Game theory and Tax & fees structure optimization and etc.Firstly, this paper starts from the research on Chinese mineral deposit and reserve, indicating that although total 171 minerals were found out up to 2013 in China and its potential resources ranks the 3rd position worldwide, but the minerals deposit and distribution still stands unbalanced, there have been significant supply shortage among many bulk minerals and resources, for example, crude oil reserve is only 7% of the global oil average reserve, potash reserve is only 1.6% of the world potash reservation and more than 50% of Chinese annual potash demand has to be imported overseas, however the potash is one of the Chinese strategic resources that is in connection with the agriculture and crop security. Secondly, the paper reviews the history and adjustments on Chinese mineral resource taxation system, discusses and analyses the taxes types, structure, system and main existing questions and concerns on resource tax, mineral compensation fees, permit and mining lease fees and rent, special gain levy and charges on oil and nature gas. Thirdly, this paper has studied on the status and characteristics of the mineral and resources, and its taxation system in developed mining countries as Canada and Australia, summarizes the mineral deposit and reserve conditions in Canada, Australia, taking coal and potash as its typical metal and non-metal minerals. The paper presents each country’s mineral and resources management mechanism, general taxation regulations and specialized taxation system on the mining sector, paying particular attention on favourable policies and incentive measures with each own characteristics, such as resources allowance, credit before taxes, loss carry over, flow-through shares(FTS) etc.In addition, taking Shandong Yankuang Group’s potash and coal development and operation in Canada and Australia as an example from successful overseas resources development cases among Chinese enterprises, the key impact factors on the mineral resource’s development and utilisation taxation system have been compared and analysed. Firstly, based on the analysis of the potash deposit and development in Canada, the mining right, rent, potash royalty, production tax, profit tax, and key impact factors on the Canadian mineral source taxation system have been studied, combining the development and progress of Yankuang Southey Potash mine with capacity of 2.8 million tons per year in Canada. Secondly, the paper analyses Australian coal recourse taxation and fees system and its key impact factors by means of studies on existing coal mines operation of Yankuang Group in New South Wales and Queens Land, Australia. Thirdly, the Chinese mineral resource development and utilisation taxation system is researched, using giant coal enterprise groups including Shenhua Group and Yankuang Group as examples, particularly, the new round reform on coal resource tax initiated on December of 2014 has been studied, including reform proposals, executions and effects in its first execution stage. Fourthly, under the principles of scientificalness, representative, hierarchy, comparability and feasibility, the mineral resource taxation system and its main impact factors have been analysed by the method of Analytic Hierarchy Process(“AHP”). Based on the grey system theory and fuzzy comprehensive assessment method, combined with AHP weighing and scores data by resource expert group, an assessment model on mineral resource taxation system is established and an applied analysis study on the Chinese mineral resource taxation system has been conducted. The result shows that the assessment to the above described Chinese mineral resource taxation system is good as it has enjoyed a sound fundamental taxation system, however there still have been a few of taxation procedures and tax levy targets that need to be improved and restructured in the future. In addition, the activites and interactions between enterprises and governments has been analysed based on the game logic, taking the environmental taxes as an example.Finally, at the current stage, China economy is turning back its solid track enev after hitting his difficult adjusting period, the social and economic stable development is reaching by means of a series of siginifcant government’s measures and policies for promoting thr reform, transforming economic structure and benefiting the society, such as streaming administration, innovation, resources refrming, proposing the project of “the Silk Road Economic Belt and the 21 st Century Maritime Silk Road” and strengthening the targeted adjustment and etc. Based on the theory of Taxes and fees structure optimisation, impact factor analtsis, this paper puts forward an optimised Taxes and fees structure scheme for China’s reform on the mineral resource development and utilisation taxation system, such as deepening the resources reform, cancelling the resources compensation fees, and setting up the new tax of environment and royaty system at a right time in the future and etc. Meanwhile, in order to promote a successful new round reform on the mineral resource taxation system, put forward the establishment and improvement of all necessary supporting policies, including setup of resource depletion compensation regulations, introduce the flow-through shares(FTS) to promote exploration investment and build a trading market for mining permits, lease and assets, and finally realize a sustainable growth and continuous prosperity on mineral resource exploration and mining sector.Sine the 1st half of 2015, a new round mineral resource taxation system is initiated, for example, the levy of rare earth resource tax on the basis of ad valorem and the cancel of resource compensation fees for rare earth and reduce the resource taxes by 50% from the taxable income for iron ore and etc. Beside that, other reforms, such as, clearing up relevant load funds, regulating resource tax and fees have been deepening as well. This paper has a comprehensive and systemic study on the status of mineral resource development and utilisation, and its taxation system for Canada, Australia and China. The main study results and innovations are as followings, even though there are a few of deficiencies and shortcomings, such as the sample and targeted country need to be expanded in the future study, and the research on mineral resource tax theory is insufficient relatively.(1) Comparative analysis of impact factor on foreign and Chinese taxation system of mineral resource development and utilisation by AHP. Based on the method of Analytic Hierarchy Process(“AHP”), the impact factor on the taxation system of mineral resource development and utilisation in Canada, Australia and China is analysed respectively, such mineral resource taxation impact factor is further compared and studied from various perspectives of global insight, world situation, China’s macro-economic climate and its tax and fees system.(2) In-depth Study on the Assessment system on foreign and Chinese taxation mechanism of mineral resource development and utilisation. An evaluation index and judge matrix to taxation system of mineral resource development and utilisation based on the grey theory is set up, and an assessment model to taxation system of mineral resource development and utilisation is developed and relevant evaluation and comparative study is completed, taking Canadian, Australian and Chinese resource taxation system as target.(3) Suggestion and recommendation study for China’s taxation system on mineral resource development and utilisation. Based on the gamen logic and the tax and fees structure optimisation theory, the status and shortcoming on China’s taxation system of mineral resource development and utilisation has been analysed and summarised by comparative study domestically and abroad. The paper puts forward policy proposals and improvement suggestions for China’s reform on the mineral resource development and utilisation taxation system, focusing on the optimised scheme for Chinese mineral resource taxation system, taxes sharing and distribution proposal, establishment and improvement of all necessary supporting policies.(4) Comprehensive and systemic assessment study on mineral resource taxation system and its policy reform suggestions. Based on more than 10 years’ experience on mineral development and operation in Canada and Australia, this paper conducted a comprehensive and in-depth study on mining management mechanism and resource taxation system in mining developed countries as Canada and Australia, by means of assessment model and expert’s scoring and participation, which is further compared and analysed with China’s taxation system on mineral resource, the challenge and circumstance in Chinese mining sector. The author also puts forward an introduction of specialized mining taxation policies and regulations from western country at an appropriate time, such as Canadian flow-through shares(FTS) for incentive exploration investment, resource depletion compensation regulations, ecological and environmental damage compensation system and royalty, so as to adjust effectively the profit among stakeholders of the government, mining enterprise and investors in a balance way, and to energize capital market of mineral exploration and development in China. Meanwhile, it will be a great help to establish a competitive and sustainable taxation system on mineral resource development, which is suitable for China’s situation and will boost Chinese mineral resource sector’s recovering and prosperity significantly.