The launch of a resource tax in western China's Xinjiang Uygur Autonomous Region is the first step toward nationwide implementation and will help conserve resources, a senior official said Monday.
"Xinjiang is rich in mineral resources like crude oil and gas. The trial move here will pilot the resource tax reform nationwide," said a statement posted on the State Administration of Taxation's website.
The reform will further promote the government-advocated concept of resource saving, environmental protection and rational development of natural resources, the official said.
It is also conducive to the country's establishment of a resource-conserving and environmentally-friendly society, the official added.
Crude oil prices in China are linked to international benchmark prices while the natural gas price has been guided by the government, which makes the new tax based on prices possible, the statement said.
The new measure, a shift from taxes based on output, set the tax rate at five percent.
In order to utilize resources efficiently, thick oil, high condensation oil and high sulphur natural gas are taxed less, at 3 percent, while oil recovered by tertiary methods is taxed at 3.5 percent, according to the statement.
The Chinese government implemented the new tax on sales of crude oil and natural gas in Xinjiang on Tuesday last week as part of a support package for the region unveiled at a central work conference held in Beijing last month.
China previously imposed a volume tax of up to 30 yuan (4.39 U.S. dollars) per tonne of crude sold and up to 15 yuan per thousand cubic meters of natural gas sold.