Five questions refined oil consumption tax adjustment

As approved by the State Council's executive meeting, the Ministry of Finance and the State Administration of Taxation jointly announced on the 28th that they will increase the consumption tax on gasoline, diesel, naphtha, solvent oil, lubricant oil, fuel oil, aviation kerosene, and other refined oil products on the 29th.

Under the pressure of economic downturn, why did China choose to adjust its refined oil consumption tax at this time? How will the adjustment bring about changes in oil prices? What are the new developments in the "combination boxing" policy?

Will the oil price rise after the tax adjustment?

China's oil prices include VAT, consumption tax, urban maintenance and construction tax, and education fees. This adjustment will affect the oil price geometry?

"The increase in refined oil excise tax and oil prices have fallen by a similar amount. After the offset, oil prices do not rise or fall." Liu Shangxi, director of the Finance Department of the Ministry of Finance, told reporters that the recent drop in oil prices in the international market has brought about a reduction in domestic oil prices. , Bringing a window of opportunity to the consumption tax adjustment.

With the increase of refined oil consumption tax, the simultaneous collection of urban maintenance and construction tax and education surcharge will also increase. However, experts estimate that this part of the increase is very small, and has little effect on oil prices.

Who will benefit from canceling the consumption tax on small-displacement motorcycles, car tires, etc.?

The consumption tax adjustment “combination boxing” played this time involves the elimination of the consumption tax on small-displacement motorcycles, automobile tires, and alcohol products. Who will benefit from this?

The heads of the two departments introduced that this adjustment is mainly to adapt to changes in the structure of production and consumption in China, and that taxable products that are not suitable for continued consumption tax will not be taxed. For example, small-displacement motorcycles have become a means of transport for urban residents and rural residents below the county level, and the elimination of the consumption tax can effectively reduce the burden on these low- and middle-income groups.

Bai Chongen, deputy dean of the School of Economics and Management at Tsinghua University, said that automobile tires and alcohol are mainly used for transportation and industrial production. The elimination of taxation can effectively eliminate double taxation and reduce the production costs of related industries.

Why increase the consumption tax for other refined oils such as naphtha?

This time, while raising the unit tax on consumption tax for gasoline and diesel, it also increased the unit tax on consumption tax for naphtha, solvent oil, lubricants, fuel oil, and aviation fuel. What signals are released from taxation of these oils?

"Naphtha, solvent oil and other oil products belong to the same category of petroleum products. The simultaneous adjustment of taxes is mainly due to the adjustment of consumption of resource products and promotion of energy conservation and emission reduction." Liu Shangxi said.

In addition, he pointed out that due to naphtha and other oil components similar to gasoline, after simple processing can be changed to gasoline and diesel, if you do not increase the unit tax accordingly, will result in greater tax differences, may affect the normal oil market Order, problems such as tax evasion and tax evasion are also common practice in many countries around the world.

How will the new tax revenue increase be used?

The increase in the unit tax on refined oil consumption tax will increase the use of tax revenue, and it is undoubtedly also a focus of attention.

According to the person in charge of the Ministry of Finance, the newly increased revenue from the increase of refined oil consumption tax will be included in the general public budget arrangement, which is mainly used to support economic restructuring and will focus on two aspects. The first is to increase pollution control and address climate change. Financial funds improve people's health and improve the people's living environment. Second, they are used to promote energy conservation and encourage the development of new energy vehicles. The central government will allocate special funds each year to ensure that the government supports the funds needed for the development of new energy vehicles.

“To solve the environmental problems that people are concerned about, such as air pollution, we need to invest a lot of financial resources. The key is to use these funds well and use them effectively,” said Bai.

At this point to adjust the refined oil consumption tax release what signal?

This time, China's adjustment of the consumption tax for refined oil products is not an isolated activity in the world. In the past two years, the United States, France, Russia, Italy and other countries have announced that they will increase the refined oil consumption tax. For example, California, which had suffered from the incident of photochemical smog in Los Angeles, currently has the highest state fuel tax in the United States. From July 1, 2013, it increased the state gasoline tax from 36 cents to 39.5 cents per gallon, which is much higher than the average of each state. Gallon 24 cents level.

“Adjusting refined oil consumption tax has become a major trend, highlighting the urgent need for global development of a green economy.” Liu Shangxi said that exhaust emissions from motor vehicles have become a major cause of air pollution. Appropriately raising the consumption tax on refined oil products can reasonably guide consumer demand and promote oil. Resources are saved and used to reduce atmospheric pollutant emissions.

It is reported that carbon monoxide and nitrogen oxides in major cities in China currently come from the exhaust emissions of motor vehicles, causing compound pollution that is characterized by ozone and ash pollution in some areas to become increasingly prominent.

Bai Chin-en believes that China has become the world's largest oil importer, and its dependence on foreign oil is close to 60%, and the cost of finding oil resources is also getting higher and higher. This adjustment is also conducive to promoting the development of China's new energy industry and pushing China's economy towards a healthy and sustainable growth model.

Experts pointed out that the implementation of the “modification and reduction” of moderate tax adjustment measures is conducive to the problem of the current narrow scope of the excise tax, the relatively small tax base, the unreasonable tax rate structure, and inadequate adjustment. To better adjust consumer spending habits, pay more taxes for large displacement vehicles and pay less taxes for small-displacement vehicles, so as to better use consumption tax to guide consumption, promote energy-saving emission reduction, and regulate income distribution.