On December 25, 2016, the Law of the People's Republic of China on Environmental Protection Tax (the "Law") was adopted at the 25th session of the Standing Committee of the 12th National People's Congress and issued upon Order of President No.61 for implementation as of January 1, 2018. 

The Law states that environmental protection tax (the "Tax") shall be levied in accordance with the Law in lieu of pollutant discharge fees as of the effective date of the Law. According to the Law, payers of the Tax shall be enterprises, public institutions, and other manufacturers and business operators directly discharging pollutants into the environment and pollutants subject to the Tax shall include air pollutants, water pollutants, solid waste, and noise. The Law prescribes five circumstances exempted from the Tax for the time being and stipulates that where the concentration value of taxable air pollutants or water pollutants discharged by a taxpayer is 30% lower than the State and local pollutant discharge standard, the Tax shall be levied at its 75% rate, and where the said concentration is 50% lower, the Tax shall be levied at its 50% rate.