China will expand its natural resource tax reforms to cover all categories from gold mines to forests beginning July 1st. What will the changes mean for businesses?

Dai Hanbao is the chief financial officer for a gold exploration, mining and processing plant in Shandong Province. Dai has been busy determining how much money his company will save because of the reforms.

Under the old rules, Dai's company had to pay the tax based on its amount of exploration. The company also had to pay mineral resource compensation fees and other charges. But under the new rule, the tax rate would be slightly lowered. The change is significant for a company that produces 20 tons gold a year.

He said, "The new taxation since July has a taxation rate of four percent. This would save us over 10 million yuan per year. This is quite large."

Another highlight of the reforms that non-tax fees will be annulled. Companies would no longer have to also pay other kinds of fees and would only have to deal with the tax bureau. In addition, the companies would only pay taxes after sales, instead of before.

He also said, "Now we pay tax after we sell the gold. Before, we have to pay when we produce. The move lightens our financial burden as we actually defer our payment, and save costs."

Downstream firms will also benefit from the tax change. Take the cement industry as an example. Producers say they are buying their materials at a lower price.

"Limestone, one of our major raw materials, would be cheaper. And our profits would rise. We are indirectly benefiting from the taxation change," said Liu Jiang, financial manager of China United Cement Zao Zhuang Co.

The tax bureau for Shandong Province says the new rules will benefit many sectors, including building materials and chemical products. Analysts say connecting the resource tax with market prices would also lift the struggling commodity sector.