China will expand a water resource tax pilot program to more areas in a bid to encourage water conservation, the Ministry of Finance (MOF) said Tuesday.
Nine provincial regions, including Beijing, Inner Mongolia, Henan, Sichuan and Ningxia will begin the new tax pilot next month, following 18 months of trials in north China's Hebei Province, according to an official statement.
After enough experience has been accumulated in the program, the policy will be promoted nationwide.
The water resource tax, which is focused on preventing unreasonable water use, is collected based on the usage of surface and underground water and stems from the country's over-30-year-old resource tax.
Water use exceeding quotas or in overexploited areas will be levied with tax rates up to four times higher, while that for agricultural purposes will see a reduction or exemption. The use of water that has come from sewage treatment facilities will also have favorable tax rates.
MOF official Wang Jianfan described the tax as a significant step in China's green development strategy, and said it will help prompt environmentally-friendly production and consumption.