Study On The Optimization Of Coal Industry Tax System

Coal resources plays significant role in development of national economy. It isnot only the material base for the improvement of national economy, but also thecritical link in sustainable development of society. Generally, due to the fact that thereasonable taxes can promote the effective utilisation of coal resources and improvethe competitiveness of coal enterprises, the policy of taxation is an important methodfor government to interpose coal industry. Nevertheless, recently, there are a host ofproblems in Chinese coal taxation system. Take Erdos as an example, the coaltaxation system and structure have several irrational points in this area. Firstly, thegovernment overemphasizes the income function of tax and ignore the adjustmentrole of it. Furthermore, obvious inequity can be found in allocation. Insufficientallocation of financial resources can not satisfy the requirement of social andeconomic development in coal exploitation areas and the improvement of coalindustry, which may lead to some social problems, such as environment and thepeople’s livelihood problems, in coal exploitation areas. In addition, for specificcategories of tax, the rate of added-value tax and corporate income tax in coalindustry are too high. Besides that, the taxation method and structure of resourcestax are unreasonable. A host of fees and funds under various pretexts lead to heavytax burden and incorrect signal of coal market, which has negative influences onmarket allocation of resources.This essay will take coal industry in Erdos as an example to analysis mainproblems in tax system of coal industry by using two methods including comparativestudy and quantitative analysis. Then, several recommendations are provided for thereformation of tax system in coal industry including proper rate decrease inadded-value tax, changing tax methods of resources tax, increasing share of localgovernments in income from resources as well as planning new local tax policy topromote the sustainable development of companies in coal industry andresource-oriented cities.