Businesses in China are being urged to prepare themselves for a new environmental tax for the start of next year. China will abandon its current system under which polluters are charged locally in favour of the nationwide environmental protection levy to reduce air, soil and water contamination, reports South China Morning Post.

The new regime will see firms that cause pollution taxed under a uniform set of national rules rather than the fees being collected at the local level. For instance, polluters nationwide will face a levy of between CNY1.2 (US$0.18) and CNY12 for every 0.95kg of NO2 or SO2 they release.

Replacing the "pollution discharge fee" regime that has been enforced since 1982, the new system will have more teeth due to more stringent and specific implementation details, which helped plugged some loopholes in the old system.

For example, small to medium-sized privately-owned businesses will for the first time be clearly included as targets for the tax. It provides incentives for polluters to reduce emissions, by cutting the tax levy on emitters by 25 to 50 per cent if their volumes are 30 to 50 per cent lower than the limits.

Polluters are also encouraged to install their own automated emission monitoring equipment as their readings are admissible as data for tax calculation.

An earlier official study estimated the tax could bring in CNY50bn a year, about three times the total raised from the fees collected from 280,000 companies in 2015.

China's stricter measures on energy saving and environmental protection this year have already had an impact on the industrial sector by shoring up the prices of cement, aluminium and coal.