China plans to drop the windfall profits tax to deal with high oil prices

International oil prices is non-stop manufacturing its new height, and 22, the U.S. dollar against the euro to new lows as well as investors worried about crude oil supply in international oil prices approaching $ 120 a barrel mark.
The same day, the New York Mercantile Exchange, light sweet crude for May delivery was $ 119.90 a barrel again to refresh the record intraday high. In the end, the New York market, oil prices closed at $ 119.37 a barrel the previous day up $ 1.89, a record close to record highs.

The sustained high oil prices are baked the world, and China is no exception. Lyon, the investment bank, recently said the Chinese government is examining the adjustment of the special oil income levy imposed on the upstream mining companies (windfall tax), China since March 26, 2006, levying the taxes. CNPC confirmed this, saying that the Government is considering to increase the threshold of windfall tax from the current $ 40 to $ 60, or to levy tax rate from 20-40% to 10-20% level.

Domestic tax system for the petroleum and petrochemical industries are brewing a major reform to cope with the impact of high international oil prices on the domestic economy. "Independent, senior industry analyst Liangwei Pei told reporters yesterday. He believes that this round for the petroleum and petrochemical enterprises, tax reform, the purpose is to reduce the refining industry losses of state-owned giants, do not raise prices of refined oil under the premise to ensure the financial security of the oil refining enterprises to protect the oil giant's enthusiasm.

Previously, the Ministry of Finance also announced that in the current quarter, PetroChina, Sinopec imported refined oil VAT front-end retreat. And, from April 1, formed by the central government will import crude oil processing loss allowance.

China can be the main means of tax regulation, there are three: refined oil VAT front-end to back the abolition of tariffs on imports of crude oil and reduce the profits tax on mining operations. "Three measures are expected to be introduced in phases, which together can make the oil refining enterprises reduced losses from 60 billion to 80 billion yuan," said Liangwei Pei, "especially to cancel tariffs on imports of crude oil is of great significance, this may be one of the Chinese energy system major initiatives. "