China Imposes a New Coal Production Tax

Jan 13, 2015 | 10:00 GMT

China Imposes a New Coal Production Tax
Chinese laborers work at a coal depot in Hebei, China, in November 2014.

(Kevin Frayer/Getty Images)


With China's housing and infrastructure construction sectors set to slow further in 2015, the next six to 12 months will be convulsive and transformative for coal and other heavy industries that have been the economic backbone of much of northern China. Against this backdrop, the Jan. 1 imposition of a value-based tax on coal production could have far-reaching implications for coal mining companies across China, especially for Inner Mongolia, Shaanxi and Shanxi — the provinces at the country's heart. The new tax comes not only at a time of rapidly declining growth and mounting financial concerns throughout much of China's coal country, but also amid a burgeoning crackdown on official corruption in Shanxi province.

The tax, meant to help local governments move away from land sales as a source of revenue, could have broad implications in China's main coal-producing regions....

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