Five percent. According to the Official Reply of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the Collection of Business Tax on Garbage Disposal Fees, the specific taxes of garbage disposal fees are known as follows: value-added tax, 3% for small-scale taxpayers and 1 1% for general taxpayers. Urban construction tax. According to the paid (VAT+business tax+consumption tax), the tax rate is 7% if the taxpayer is located in the urban area, 5% if the taxpayer is located in the county or town, and 1% if the taxpayer is not located in the urban area, county or town.