China will extend a value-based tax ranging from 5 per cent to 10 per cent on sales of oil and natural gas nationwide from next month, says its Ministry of Finance.

China imposed a 5 per cent tax on oil and gas sales in Xinjiang on a trial basis in June last year.

The new regulation will erode profits of firms such as PetroChina and Sinopec but is likely to help in financing nuclear and wind power projects.

Taxes on coal are expected to continue to be based on volume rather than value. China will levy a tax of 8–20 yuan ($1.25–3.14) /tonne for coking coal sold and 0.3–5 yuan ($0.05–0.78) /tonne for other coal from next month, said the ministry.

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