• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 13 hours americavchina.com
  • 1 min Greta named Time Magazine "Person of the Year"
  • 11 mins DUMB IT DOWN-IMPEACHMENT
  • 4 hours Emissions Soar as Flaring Frenzy Breaks New Records
  • 17 hours Tories on course to win majority
  • 18 hours Winter Storms Hitting Continental US
  • 9 hours Aramco Raises $25.6B in World's Biggest IPO
  • 2 hours POTUS Trump signs the HK Bill
  • 16 hours WTO is effectively neutered. Trump *already* won the trade war against China and WTO is helpless to intervene
  • 20 hours 2nd Annual Great Oil Price Prediction Challenge of 2019
Alt Text

Is China Caving To U.S. Oil Sanctions?

China’s imports of Venezuelan oil…

Alt Text

Houthi Attacks: The Greatest Threat To Saudi Oil Production

The increasing missile, drone, and…

Alt Text

Iran's President Vows Revenge For Oil Tanker Attack

Though details of Friday’s tanker…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

China Looks To Close Teapots’ Oil Tax Loopholes

China is tightening government control over the collection of the oil consumption tax in order to eliminate the loopholes that independent refiners—known as teapots—have been exploiting to beef up their profitability.

The stricter oil tax collection move is closely watched by oil analysts because it could hurt teapots’ profit margins and ultimately affect Chinese crude oil imports and oil product exports, S&P Global Platts’ Oceana Zhou wrote in an analysis on Thursday.

As of March 1, China is using a new tax reporting system that tightens transaction monitoring, and it is trying to make the tax collection more effective by eliminating the role of the provincial governments in the tax collection.

Independent refiners have so far enjoyed the protection of their respective local governments that have been collecting the tax revenues from the teapots, but all tax revenue has gone to the central government. Provinces where independent refiners are based have not fully collected the oil consumption taxes and have given tax breaks to the teapots, to ensure local employment and continuous income.

“And unlike their state-owned peers, which pay tax revenues to the central government, local teapots’ fiscal contributions stay within their locality. As such, teapots have received strong support in the form of tax breaks and cheap access to land. Local authorities have even offered teapots refunds on the consumption tax—on blending components for gasoline—or have not been collecting it from the teapots at all,” Michal Meidan of Energy Aspects wrote in a paper for the Oxford Institute for Energy Studies last year. 

Now, together with an updated tax reporting system, China’s central government is said to be considering sharing the tax revenue with the provincial governments, Platts’ Zhou says. This would encourage the local governments to collect the oil consumption tax in full and in line with regulations in order to boost their tax revenues.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play