BEIJING -- China will allot revenue from the environmental protection tax to local governments to motivate participation in the fight against pollution.

China's Environment Tax Law will be effective on Jan 1, 2018, according to a decree by the State Council signed by Premier Li Keqiang.

China has collected a "pollutant discharge fee" since 1979. However, some local governments exploit loopholes and exempt enterprises which are otherwise big contributors to fiscal revenue. For years, regulators have suggested replacing the fee system with a law.

Under the new law, which targets enterprises and public institutions that discharge listed pollutants directly into the environment, companies will pay taxes for producing noise, air and water pollutants as well as solid waste.

Tackling pollution has been listed as one of "the three tough battles" that China aims to win in the next three years, according to the Central Economic Work Conference that concluded last week.

Official data showed from January to November, China investigated over 35,600 violations of environmental protection laws and regulations, up more than 102 percent year on year.