Implementing environmental protection tax in China: an alternative framework

Wei Cai, Min Bai, Howard Davey

Research output: Journal PublicationArticlepeer-review

2 Citations (Scopus)


Purpose: The purpose of this study is to better understand the nexus between environmental taxes and other environmental management systems (EMSs) and to propose an alternative framework for implementing environmental protection tax (EPT) in China. Design/methodology/approach: The study uses a multimethod approach encompassing document analysis and comparative analysis. The archival data covers laws, reports, regulations, guidelines and standards related to the EPT and EMS sub-systems in China. Findings: The study identifies several institutional features of environmental taxes that have not been fully explored in past tax research. In addition, the study reveals that information-sharing mechanisms are key to addressing the risks and uncertainties associated with the implementation of an environmental tax and that the mechanisms are grounded in the nexus among EPT and two EMS sub-systems. Research limitations/implications: The findings of this study have implications for the understanding of China’s environmental tax system, the Environmental Impact Assessment system and the pollutants discharge permit (PDP) system. The construction of an alternative framework provides insights for approaches to environmental taxation. A limitation of this study is that the application of the framework might be undermined by the inaccurate manual sampling, as some pollutants may be non-replicable. Practical implications: The findings of this study are relevant to policymakers who are designing, improving or abandoning environmental taxes for alternate solutions to environmental issues. Social implications: The insights gained from this study may be of assistance to lower the risks and uncertainties associated with the implementation of an environmental tax. Originality/value: The study contributes to approaches to environmental taxes by constructing an alternative framework that connects an environmental tax system with two EMSs. The framework lays the groundwork for some promising research opportunities. Additionally, the study extends the tax accounting literature (Hanlon and Heitzman, 2010) by connecting accounting and environmental knowledge and developing a transdisciplinary approach. The study also contributes to the emerging body of literature that addresses the challenges in implementing environmental taxes in China.

Original languageEnglish
Pages (from-to)479-513
Number of pages35
JournalPacific Accounting Review
Issue number3
Publication statusPublished - 18 Apr 2022
Externally publishedYes


  • Environmental impact assessment (EIA)
  • Environmental management system (EMS)
  • Environmental protection tax (EPT)
  • Pollutants discharge permit (PDP)

ASJC Scopus subject areas

  • Accounting
  • Finance


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