The "Measures for the Pilot Implementation of Water Resources Tax Reform" will be implemented on December 1, and household domestic water will not be subject to water resource tax

On October 16, according to the official website of the Ministry of Water Resources, the Ministry of Finance, the State Administration of Taxation and the Ministry of Water Resources jointly issued the "Implementation Measures for the Pilot Reform of Water Resources Tax" (hereinafter referred to as the "Measures"), which mentioned that the pilot project of changing water resources fees to taxes will be fully implemented nationwide from December 1 this year. It is understood that 10 provinces have previously implemented the pilot. After the full implementation of the pilot project of replacing water resources fees with taxes, all water resource tax revenues will be attributed to the local governments (the original water resource fee revenues will be divided between the central and local governments at a ratio of 1:9), and local independent financial resources will be appropriately increased.

The use of groundwater, car washing and other special water withdrawals is taxed at a high rate

The Measures stipulate that the water resources tax shall be levied on surface water and groundwater, excluding reclaimed water, rainwater harvesting, seawater and desalination water, brackish water and other unconventional water.

The "Measures" make it clear that the tax amount shall be determined from a higher level for special water withdrawals such as car washing, bathing, golf courses, ski resorts, etc., as well as the withdrawal of groundwater.

There are six situations in which water resources tax is not paid: rural collective economic organizations and their members draw water from the ponds and reservoirs of their collective economic organizations; small amounts of water for family life and sporadic free-range breeding, captive livestock and poultry drinking, etc.; The water project management unit allocates or dispatches water resources to take water; In order to ensure the construction safety and production safety of underground projects such as mines, it is necessary to carry out temporary emergency water intake (discharge); Temporary emergency water intake for the purpose of eliminating harm to public safety or public interests; In order to fight drought in agriculture and maintain the ecology and environment, it is necessary to temporarily take water urgently.

The Measures also mention that all water tax revenues belong to local governments and are included in the general public budget management. The water administrative departments in conjunction with the relevant departments to perform water resources development, conservation, protection, management functions and other related expenditures shall be arranged by the financial budget at the same level. The local people's government shall make overall arrangements for the collection and management of the original water resource fees.

In response to a reporter's question, the person in charge of the relevant department said that after the full implementation of the pilot project of changing water resources fees to taxes, all water resource tax revenues will belong to the local governments (the original water resources fee revenue will be divided between the central and local governments at a ratio of 1:9), and the local independent financial resources will be appropriately increased.

Water for agricultural production within the quota is exempt from water tax

The Measures also make specific provisions on the taxpayers, tax basis, tax amount standards, tax incentives and other elements of the tax system for water resource tax.

In response to a reporter's question, the responsible person of the relevant department said that the taxpayers of the water resources tax are units and individuals that directly draw water resources from rivers, lakes (including reservoirs, water diversion projects, and other water resources allocation projects) and underground. The water resource tax is levied on a volume-based basis.

In terms of tax standards, the water resource tax is differentiated according to the status of water resources, the type of water withdrawn and economic development. The State uniformly clarifies the minimum average tax rate standards for water resources tax in all provinces, autonomous regions and municipalities directly under the Central Government, and the specific applicable tax amount shall be determined by each province, autonomous region and municipality directly under the Central Government.

In terms of tax incentives, water resources tax is exempted for five situations, including water intake for agricultural production within the prescribed limit; Authorize local governments to reduce or exempt water resources taxes for water withdrawals for agricultural production and for water withdrawals for rural centralized drinking water projects that exceed the prescribed limits; The water resource tax shall be reduced for relevant taxpayers whose water use efficiency reaches the advanced value of the national water quota.

According to reports, compared with the previous two reform pilots, the "Measures" further define the scope and object of water resource tax collection; The requirements for taxpayers to declare and pay taxes applicable to multiple tax rates for water intake have been refined; strengthened the positive incentive and guiding role of preferential tax policies; In line with the relevant provisions of the Resource Tax Law, the place of payment of water resources tax will be adjusted from the place of production and operation to the location of water intake.

The Measures appropriately expand the authority of local tax administration, including: adding preferential tax policies that can be reduced or exempted by local governments; Simplify the tax rate of water tax, and empower local governments to have more room for adjustment when determining specific tax amounts; Authorize local governments to determine the methods of water resource tax verification and collection for specific water withdrawals.

The "Measures" clarify the relationship between water resources tax and water supply price, urban public water supply enterprises are taxpayers of water resource tax, water resource tax and tap water price are separated from the price tax, and relevant enterprises are guided to take measures to control and reduce water leakage through taxation.

All the revenue from the water tax is reserved for the local government

Since July 1, 2016, 10 provinces (autonomous regions and municipalities), including Hebei, Beijing and Tianjin, have successively carried out pilot water resource tax reforms. The reform pilot has achieved remarkable results in curbing groundwater overexploitation, changing the mode of water use, promoting water-saving transformation, and standardizing water intake behavior.

For the significance of the full implementation of the pilot project of changing water resources fees to taxes, the person in charge of the relevant department said in response to reporters' questions that the full implementation of the pilot project of changing water resources fees and taxes and giving full play to the role of tax leverage is conducive to enhancing the awareness and motivation of enterprises and other social entities to save water, encourage enterprises to improve water efficiency through water-saving transformation and technological innovation, promote the intensive recycling of water resources and ecological environmental protection, and promote the formation of green development methods and lifestyles. At the same time, the pilot project of replacing water resources with tax and other reform measures such as groundwater overexploitation control and water intake permit management are coordinated and promoted in tandem, which is conducive to the implementation of the rigid constraint system of water resources and the comprehensive improvement of the level of conservation, intensive and safe use of water resources.

Water security is related to the national economy and people's livelihood. The mainland has more people and less water, and the distribution of water resources in time and space is uneven. With the continuous development of the economy and society, the demand for water resources in the mainland continues to grow, the contradiction between supply and demand of water resources is becoming increasingly prominent, and the overall utilization efficiency of water resources in the mainland is not high, and the high-quality economic and social development and ecological environmental protection are facing the challenge of water shortage. Resource tax is an important means to guide the rational allocation of resources.

The person in charge of the relevant department stressed that the full implementation of the pilot project of changing water resources fees to taxes should focus on grasping four principles: First, to achieve a smooth transition. Coordinate the existing pilot system of water resource tax reform and the water resource fee collection system, and realize the smooth transition from the water resource fee system to the water resource tax system on the premise of maintaining the stability of the elements and basic framework of the tax system.

The second is to strengthen classification and control. The tax amount for water withdrawal and groundwater withdrawal in areas with serious shortage of water resources and overload should be determined at a high level, and the role of tax regulation should be better brought into play by setting differential tax amounts, so as to curb over-exploitation of groundwater and unreasonable demand for water.

The third is to reflect regional differences. Fully consider the differences in the status of water resources and the level of economic development in different regions, reasonably set the minimum average tax level in different regions, and authorize local governments to determine the specific applicable tax amount of water resources tax in their respective regions in accordance with regulations.

Fourth, mobilize local enthusiasm. All the revenue from the water tax should be left to the local governments, and the local independent financial resources should be increased through reform, the local tax sources should be expanded, and the local tax administration authority should be appropriately expanded, so as to give better play to the enthusiasm of the local governments.

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Text/Beijing Youth Daily reporter Song Xia

Editor/Fan Hongwei