China to pilot environmental protection tax on VOCs starting 2027

BEIJING - China will carry out pilot projects to levy environmental protection tax on volatile organic compounds (VOCs) starting Jan 1, 2027, as the country moves to strengthen air pollution control, according to the Ministry of Finance (MOF) on Friday.

The MOF, the State Taxation Administration and the Ministry of Ecology and Environment jointly issued a notice detailing the pilot, under which all VOCs will be brought into the scope of environmental protection taxation.

VOCs are a key source of fine particulate matter (PM2.5) and ozone formation, contributing to atmospheric environmental issues such as smog and photochemical smog. Currently, more than 300 types of VOCs can be detected.