Experts urge caution on imposition of green tax

An environmental tax scheme can be a powerful tool to cope with China's rising environmental challenges, but the scheme should be introduced only after careful consideration and implemented skillfully, experts said Sunday during an industry summit held in Nanning, capital of South -China's Guangxi Zhuang Autonomous Region.

The comments came after calls for the imposition of a green tax, which was believed by the central government to be useful to combat rampant pollution affecting many Chinese cities, became louder and louder in recent months.

The government is moving forward with upgrading its value-added tax and reforming resources tax while considering imposing pollution and environmental taxes, Finance Minister Lou Jiwei said at a forum held in Beijing on March 23.

"Regulation by the government of private companies is definitely needed in this sector and a tax will provide the government with financial resources to do things," Steve Clark, CEO of Suez Environnement, told a seminar at the China Green Companies Summit in Nanning.

However, experts urged caution against the negative aspects of such a tax.

"The government has a strong motivation to impose a green tax as it needs money, but with the economy losing its steam and the industrial sector showing signs of weakness, imposing the tax will only make the situation of the companies worse," Zhao Lijun, chairman of Poten Environment Group Co, said at the seminar.

Zhao said that the government is too slow to address the environmental issues, noting that if such attention was given to the sector 10 years ago when the economy was growing at a double-digit rate, the picture could have been much -better.

"The green tax is a hot topic these days. I don't want to oppose the tax, but I need to point out that the market still has not come into full play in determining the price for the products and services related to the environment industry," Johnny Kwan Zhihua, president of BASF (China) Co, told the Global Times on Sunday.