[sustran] China Lawmakers Cool to Fuel Tax Proposal

Paul Barter tkpb at barter.pc.my
Wed Nov 11 10:23:36 JST 1998


China Lawmakers Cool to Fuel Tax Proposal

               Reuters
               09-NOV-98

               BEIJING, Nov 9 (Reuters) - A plan to replace highway
maintenance fees with fuel taxes has been harshly criticised by
members of China's parliament, the China Daily said on Monday.

               Deputies of the standing committee of the National People's
Congress, China's parliament, expressed doubts that the introduction
of fuel tax proposed for next year would replace the revenue collected
by the highway fee system, the newspaper said.

               "If the road fees were removed, the returns on investment
in highways would not be guaranteed", the newspaper quoted an NPC
deputy as saying.

               The amendment to the national highway law which calls for
replacing maintenance and licensing fees with a fuel tax, still has to
win parliamentary approval.

               Opposing lawmakers also argued that fuel taxes would
impose heavy burdens on farmers who buy diesel for tractors and
the hike in fuel prices would create fresh incentives for smugglers.

               China's State Council, which submitted the proposal, defended
the plan as a method to eradicate randomly collected road fees and cut
costs for businesses and individuals, the newspaper said.

               Various layers of Chinese governments currently impose
hefty fees on highway drivers.

               The fuel tax would not affect toll highways backed by foreign
and local investors or local governments, which could continue
collecting fees, sponsors said.

               "The item of collecting tolls has not been cancelled in the
newly drafted law," the newspaper quoted an official from the
highway management department.

               Fuel tax would be collected by the central government
and then distributed to local officials as road funds. Part of the
collected revenue would be returned to farmers to compensate
for the higher prices they pay for fuel.



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