Green Taxation In China: Environmental Taxes Theory And Its Application

Along with the market economy transformation and the establishment for sustainable development strategy at the national level, the rigorous situation of environment and natural resources confronts China. Thus, the introduction of environmental taxes in a new wave of tax reform is paid more important attention to. Furthermore, the improvement of tax policy and tax system is one of the most imperative aspects on the innovation of environmental policies by request of harmonious society. Actually, the present polluting emission charge system can't resolve the problem of pollution on environment effectively with some institutional flaw. Secondly, the environmental investment from fiscal support can be inadequate to meet the environmental protection requirement with unbalanced revenue-expenditure structure. Above of all, the complete environmental taxation hasn't been built up in China. Low green-extent and weaker effect of environmental taxes don't provide incentive and accumulate funds efficiently for resources protection and utilization. It's unfavorable to not only economic pattern transformation from expansive-oriented to intensive-oriented, but also health and stability of economy development. Environmental taxes theory and international fruitful experiences demonstrate that environmental tax policy can optimize resources allocation in view of economy and play active role in environment protection with the addition of bringing non-environmental gains. Therefore, the environment tax reform (ETR) in China is a kind of inevitable trend.Theoretically based on Pigovian tax principle under competitive-market hypothesis, environmental taxes can attain Pareto-optimality by spontaneous regulation. But, in realistic economy, there are some imperfect elements taken into consideration, such as non-competitive market structure, uncertain information, incomplete monitoring and combination with the second-best tax system. OECD countries were affected significantly by these theories during their environmental tax reform. In my study, the implementary process of environmental tax policies in China, namely follow as the way that is from easy to difficult, from involving into the original tax system with internal adjustments to developing independent categories of environmental taxes, so as to establish a proper environmental taxes system that consists of general environmental tax, direct contaminative tax, polluted product tax and important resources tax. As the consequence of The ETR, the lower green-extent level of the original tax system is enhanced largely by the roots. China's tax system will be made to be more "green". At the same time, There are several approaches based on associated with several issues of macroeconomic realm in China, which help for alleviating the negative influence on national economy and the conflict of income disparities brought by ETR, including the adjustment of the preferential tax polices, and the improvement of different tax reform combination.