Recently, Beijing issued its first payment certificate of the water resource tax to the Badaling office in Yanqing District, who in turn paid a water resource tax of 93,573 yuan (US$14,342.8).
Since Dec. 1, 2017, Beijing launched the fee-to-tax reform on water resources. Under the reform, the city levies more tax for the use of water beyond the water consumption quota, and raises the tax criteria of underground water consumption for special industries to 160 yuan per cubic meter.The tax on residential water consumption remains unchanged, and the stadiums of the 2022 Winter Olympics are exempt from the water resource tax.
Excessive water use carries up to triple the average tax
In December 2017, Beijing issued the "Measures for Pilot Reform on Water Resources Tax of Beijing (hereinafter referred to as the "Measures"), and became one of the second batches of provinces and cities to carry out pilot reform on the water resource tax in China. By 6 p.m. on Jan. 3, a total of 149 companies and individuals had declared 555,000 yuan of the water resource tax in 15 tax bureaus in the city's Dongcheng, Changping, Daxing and other districts.
The taxpayers of the water resource tax are organizations and individuals drawing water directly from rivers, lakes and reservoirs, and underground water sources. As specified in the Measures, Beijing levies two, two-and-a-half, and three times of the applicable tax if the water usage exceeds by 20 percent or less, by 40 percent or less but over 20 percent, and by more than 40 percent, respectively, beyond the water consumption quota. The city will continue to levy an even higher tax of 153 yuan per cubic meter on special industries with high water consumption, including car washes, high-end spas, water purification companies, golf courses, and ski resorts.
Raising awareness on water conservation
The reform on the water resource tax strengthened the role of tax measures in regulating water consumption beyond the quota, water use in special industries with high water consumption, and excessive drawing of underground water. The reform will help to curb excessive water consumption, adjust water demand, and increase the public's awareness on water conservation, while maintaining the water supply for reasonable daily use, according to the municipal finance authority.
Except for the water consumption in public water supply in urban areas and hydropower generation, the tax criteria have been categorized by underground water and surface water. According to the criteria, a relatively high tax is levied on the use of underground water, while a relatively low tax is levied on water consumed beyond the prescribed limit in the agricultural production and the centralized water supply in rural areas for daily use. The move helps to reduce the economic burden on farmers, promote water conservation and the improvement of agricultural irrigation, and increase the awareness on water conservation among farmers. The tax will also apply to water use during construction projects, but recycling the water will help lower the tax.
Winter Olympics stadiums receive tax exemption
The fee-to-tax reform did not put more economic burdens on companies supplying public water to urban areas, nor on normal industrial and agricultural production and the residents' daily water use. The water resource tax for residents is 1.57 yuan per cubic meter. The city also implemented a few policies of tax exemption, which covers water use in agricultural production within the quota, recycled water upon waste water disposal, water used by military and police apart from the urban public water supply network, water used in pumped storage power generation, and water used in constructing and maintaining stadiums of the 2022 Winter Olympics during the construction, pilot run, test events, and the Winter Olympics and Paralympics Games.
Public services sectors follow the tax criteria for residents
According to the criteria, some non-residential water use in public services continues to follow the tax criteria for residents under the original preferential policies, which include water used in schools, water used by social welfare organizations in offering care, nursery and rehabilitation to the elderly, the disabled and orphans, water used by community neighborhood committees in public welfare service facilities, water consumed in convenience baths supported by the government, water used by non-commercial parks, public toilets and garbage buildings managed by the landscaping and sanitation departments, and water used in landscaping and sprinkling by the landscaping and sanitation departments.
The specific tax for schools is subject to relevant regulations of the education department, and the tax for the public welfare service facilities of social welfare organizations and community neighborhood committees is determined by the civil affairs department. The convenience baths pay the tax according to relevant regulations by the commerce department and the water administration department.