Study Of The Tax Policies Of The Electricity Industry

On October 15, 2007, 17th National Congress of the Communist Party of China was held successfully. It was pointed out in Hu Jintao's reports that, "Adhering to the basic state policy of conserving resources and the environment is vital to the immediate interests of the people and the survival and development of the Chinese nation. We must give prominence to building a resource-conserving, environment-friendly society in our strategy for industrialization and modernization and get every organization and family to act accordingly. "It was also stressed that awareness of conservation would be firmly established in the whole of society.In recent years, the party and the government have taken the large—scale action to conserve energy and reduce emissions, and remarkable achievements, which have captured the world's attention, have been scored in promoting energy, resources, ecological and environmental conservation. In terms of the electric power industries, according to the latest statistics from National Development and Reform Commission, up to now, small thermal power generating units with the total capacity of 5.5 million kilowatts have been closed down, which is 55 percent of the goal of 10 million kilowatts in this year, and that makes it come true that more than half of tasks are completed over half of the time.The proportion of the small thermal power generating units to the whole installed capacity of the nation has declined from 30% to 20%.And according to the statistics from State Environmental Protection Administration, from January to May, the newly-added installed capacity of flue gas desulphurization and denitrification was 27.6 million kilowatts. Although growth in electric power generation was 14%, the discharge of sulfur dioxide decreased by 5.4%,which made a great contribution to reducing emissions of sulfur dioxide.At present, promoting the sustainability of economic development has become the orientation of economic development plans in China. As the important industry of energy supply and consumption for the national economy, there is a lot of pressure in saving energy and reducing emissions on the electric power industry. Tax policy, as the important tools in macroeconomic regulation, play an irreplaceable role in promoting energy-saving-oriented development in enterprises. And the comprehensive implementation of the strategy of sustainable development will have great and far-reaching significance for tax theory and practice.The current tax regulation is inefficient in resolving the problems of energy-wasting and environmental pollution, therefore, it is propitious to deepen and develop the theory, adjust and improve the current tax policy, and implement the strategy of sustainable development better, that we research the relation between the current tax regulation and the development of electric power industry regards of tax, and seek for the tax policy for promoting energy-saving and environment-protecting. Based on the conscientious analyze of characteristics of the electric power industry and in virtue of the developed countries' experience, the writer research the tax system to promote energy-saving-and-environment -protecting-oriented development of the electric power industry in this paper.There are five parts in this paper. In the first part, in terms of the current condition of Chinese electric power industry, the writer analyses its characteristics and its position in national economy, and points out what restrict its development, which is the actual basis of make suggestions for tax policy.In the second part, the writer analyzes theoretically the influences of tax policy on the electric power industry. The analysis mainly relates government intervention theory, government regulation theory, public product theory and externality theory. To conclude pellucidly the characteristics and the defects of tax system in electric power industry, the writer also compares the tax burden in the whole industry with that in each industry, such as hydroelectricity, thermal power and wind power, which provides a theoretical basis of improving the tax system further.In the third and fourth part, the writer summarizes each tax preferential policy in the electric power industry both of China and the developed countries. The comparison of each tax policy of different countries provides some experience to reform the current tax system and establish an energy-saving-oriented tax system. In the fifth part, there are some suggestions. With an eye to the whole, the writer first creates the frame of tax structure, then concludes the supporting principles in reformation of tax system: combination of indirect guidance and direct encourage, combination of encouraging policy and restrictive policy, combination of all-directional promotion and multi links and combination of tax variety orientation and goals of energy-saving and environment-protecting policies, and in the light of these principles, the writer analyzes all types of the electric power industry specifically, such as wind power, hydroelectricity and nuclear power, presents some opinions on tax policy to promote energy-saving and highly efficient development in the electric power industry. And aiming at the special reformation of electric power system in the country, the writer summarizes points for improving the variety of value added tax.