China will alter the tax structure on the profits of energy products starting with a trial program in Xinjiang, reported state media. The new system will take into account resource prices, a change from the current system that levies taxes based on the actual output. Early predictions suggest a 3-5% tax rate on resources like petroleum, but the process of national rollout for the reforms could take 2 to 3 years. Other provinces that may be eligible for early trial programs include Shanxi province and the Inner Mongolia autonomous region, both inland provinces with a wealth of natural resources. The new tax reforms will increase the cost of resources and could potentially lead to price hikes.
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