China’s Ministry of Finance announced the expansion of Water Tax Interim Measures nationwide starting December 1, aiming to provide local authorities with more revenue amidst debt concerns. The measures seek to protect water resources, address supply-demand issues, and refine the taxation system.
All water resource tax revenues will be allocated to local governments to enhance financial resources and tax bases. While the impact on local authorities’ debt may be limited, it signifies efforts to strengthen local fiscal capabilities.
Revenue from water resource fees is divided between central and local governments, with the central government receiving a portion of the income. The move reflects ongoing efforts to support local economies through various fiscal measures.