Wed, Dec 20, 2017 - Page 8 News List

Managing water through taxation

By Chang Yen-ming 張炎銘

Yilan County Acting Commissioner Derek Chen (陳金德) said he wants to collect a special tax on water resources used for industrial purposes. This is a good idea and Chen’s determination is positive.

It is in sharp contrast with the Changhua County Government, which has advised people who dig illegally on how to apply for water rights and has provided a budget for the purpose, meaning that taxpayers subsidize the digging of illegal wells.

When I was a water official, Yilan County was the model of good water resource management, reaping positive results in banning illegal wells in coordination with the central government.

Now, in tune with the popular local mood, the Yilan County Government wants to set the trend by levying this special tax, which is praiseworthy.

However, the Water Act (水利法) has no such “special tax on water resources.” Although the county government can draw up an ordinance to instate such a tax, get county council approval and put it into practice, the act has provisions for water rights fees and water conservation charges. Why not just combine the two?

A special tax on water resources for industrial use would work similarly to a water conservation charge, in that industrial users would pay most of it.

However, the water conservation regulations offer users reduced rates as a reward for saving water, whereas the special tax envisaged by the Yilan County Government does not.

Another difference is that water conservation charges can only be levied on piped water, whereas the proposed special tax would be based on water consumption allocated by the county government, including surface and groundwater.

However, water rights allocated by the county government only include groundwater and county-managed rivers, but not Yilan County’s main water source, the Lanyang River (蘭陽溪), which is managed by the central government. It seems biased to only levy the special tax on water for industrial use.

The Lanyang River basin is the most abundant of all river basins in Taiwan, but there is only one listed reservoir in the basin, the Luodong Weir (羅東堰), which is just a weir, not a dam.

Therefore, Yilan County rarely experiences water shortages, but groundwater is over-pumped in some parts of the basin, causing groundwater levels to fall, which causes land subsidence.

The situation regarding surface water and groundwater are therefore completely different.

The county government wants to levy a special tax of NT$2 per tonne of surface water and NT$4 per tonne of groundwater, which shows that it fully understands the difference between the two.

Unused surface water flows into the sea, but the Luodong Weir has no storage function, so charges for surface water could be cut further to encourage people to use more of it.

Furthermore, groundwater resources cannot be fully protected by taxing water for industrial use. All groundwater use should be treated the same and included in the scheme, no matter what it is used for.

Water for agricultural use accounts for about 70 percent of the nation’s total water rights allocation and a similar proportion of total actual water use. There is a price adjustment system used to control the quantity of water used for farming.

Water resource management and water-saving measures cannot be discussed without talking about water for agricultural use.

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