7.1 Water Pricing Framework in China
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is collected by the permit approval agency, although those fees levied by the RBOs
are instead collected by the provincial water department where the abstraction site
is located.
In 2016, according to the state requirement to expand resources tax coverage,
China piloted a water resources fee-to-tax reform in Hebei Province (Ministry of
Financing and State Administration of Taxation 2016; Ministry of Financing et al.
2016). The total tax revenue generated by this pilot scheme was three times greater
than before the reform. In 2017, the pilots were extended to nine other provinces
(Ministry of Financing et al. 2017). During these pilots, the fee rate was shifted to
the tax rate without change, and the collection agency was transferred from the water
resources department to a taxation agency.
7.1.2 Water Supply Tariff from Hydraulic Engineering
The water supply tariff from hydraulic engineering is a kind of service charge for
water supply from hydraulic engineering to the users, such as cultivated lands, water
supply companies, and industrial enterprises. These engineering includes barring,
storage, diversion, and pumping projects and supplies water without treatment.
The tariff is formulated according to the principles of cost recovery, reasonable
profit, higher price for better quality, and fair affording, and it is regulated by changes
in costs, expenditures, and the water supply and demand relationship. The tariff is
divided into agricultural and non-agricultural groups. The agricultural water supply
is stipulated to cover costs and O&M expenditures, but without profits and taxes. The
non-agricultural water supply is stipulated to not only cover costs and expenditures,
but also pay taxation and generate profits. The profit is based on the net water supply
asset with a rate of 2–3% more than the long-term commercial bank loan rate. The
tariff for central and cross-province projects is approved by the pricing department
with the water department of the State Council. The management rights and approval
procedures for the local projects are decided by the provincial pricing department
with the water department (NDRC & MWR 2003).
7.1.3 Urban Water Supply Tariff
The urban water supply tariff is also a service charge. The urban water supply tariff
refers to the price for commodity water supplied by urban water supply enterprises
through an engineering facility that purifies and sterilizes surface and groundwater
to ensure it meets national standards. The urban tariff is formulated according to the
principles of cost recovery, reasonable profit, saving water, and fair affording. The
urban water supply tariff implements governmental pricing and a system of hierarchical management according to a pricing management list. The pricing departments of the governments above the county levels are responsible for the urban tariff
145
is collected by the permit approval agency, although those fees levied by the RBOs
are instead collected by the provincial water department where the abstraction site
is located.
In 2016, according to the state requirement to expand resources tax coverage,
China piloted a water resources fee-to-tax reform in Hebei Province (Ministry of
Financing and State Administration of Taxation 2016; Ministry of Financing et al.
2016). The total tax revenue generated by this pilot scheme was three times greater
than before the reform. In 2017, the pilots were extended to nine other provinces
(Ministry of Financing et al. 2017). During these pilots, the fee rate was shifted to
the tax rate without change, and the collection agency was transferred from the water
resources department to a taxation agency.
7.1.2 Water Supply Tariff from Hydraulic Engineering
The water supply tariff from hydraulic engineering is a kind of service charge for
water supply from hydraulic engineering to the users, such as cultivated lands, water
supply companies, and industrial enterprises. These engineering includes barring,
storage, diversion, and pumping projects and supplies water without treatment.
The tariff is formulated according to the principles of cost recovery, reasonable
profit, higher price for better quality, and fair affording, and it is regulated by changes
in costs, expenditures, and the water supply and demand relationship. The tariff is
divided into agricultural and non-agricultural groups. The agricultural water supply
is stipulated to cover costs and O&M expenditures, but without profits and taxes. The
non-agricultural water supply is stipulated to not only cover costs and expenditures,
but also pay taxation and generate profits. The profit is based on the net water supply
asset with a rate of 2–3% more than the long-term commercial bank loan rate. The
tariff for central and cross-province projects is approved by the pricing department
with the water department of the State Council. The management rights and approval
procedures for the local projects are decided by the provincial pricing department
with the water department (NDRC & MWR 2003).
7.1.3 Urban Water Supply Tariff
The urban water supply tariff is also a service charge. The urban water supply tariff
refers to the price for commodity water supplied by urban water supply enterprises
through an engineering facility that purifies and sterilizes surface and groundwater
to ensure it meets national standards. The urban tariff is formulated according to the
principles of cost recovery, reasonable profit, saving water, and fair affording. The
urban water supply tariff implements governmental pricing and a system of hierarchical management according to a pricing management list. The pricing departments of the governments above the county levels are responsible for the urban tariff