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China collected 10.1 billion yuan (US$1.26 billion) in terms of natural resources tax in the first half of the year, up 46 percent over the same period last year, according to a report in the Economic Daily on Friday.

China raised natural resources tax rates in 2005 for a number of resource products, a move aimed at ensuring that non-renewable natural resources are utilized more effectively.

The current natural resources tax uses a fixed rate based on a company's production and sales.

The country's energy industry paid 751.3 billion yuan (US$93.9 billion) in value-added tax from 2001 to 2005, increasing at an annual average rate of 18.9 percent and accounting for 19.4 percent of total domestic value-added tax revenue.

In 2005, the State Administration of Taxation readjusted natural resources tax rates for coal in 12 provincial areas, as well as tax rates on crude oil, natural gas and some other non-metal mineral resources. The administration also adjusted tax rates for coal in the country's five coal production areas in 2004.

With China's economy growing so rapidly, the demand for natural resources is soaring.

However, Chinese businesses use resources inefficiently and often fail to protect them. Official statistics show the average recycling rate for the country's coal mines is about 40 percent, with that of small mines down to as little as 15 percent.

(Xinhua News Agency August 12, 2006)