Beijing studies new taxation and subsidy scheme for its sea freight sector

Beijing studies new taxation and subsidy scheme for its sea freight sector

BEIJING is studying a set of 'ocean shipping strategies' to enhance competitive advantages of the domestic carriers in the international market and promote sustainable development of the industry, China Securities Journal reports.

The strategies will provide guidance in setting future development targets, which might involve taxation and setting up of exclusive fund for the industry.

The scheme is expected to suggest copying international practices in taxation, and impose levies on carriers based on deadweight tonnage instead of their profits.

Domestic carriers have to pay income tax and business tax while their foreign counterparts only have to pay tonnage tax.

In addition, seafarer's income tax might also be reduced. The government is said to be reviewing exempting the income of Chinese seafarers get when sailing in foreign waters from income tax, or raising the tax-free threshold.

China is also considering an exclusive fund for ocean shipping using national treasury, which will be used for collecting old ships for scrapping to ease overcapacity.

Statistics show, among 15 shipping companies listed in the A share market, seven expected shrinkage of profit. Cosco recorded mega loss of CNY9.56 billion (US$1.54 billion).

Suffering from a depressed market, Chinese carriers are appealing for government support in relieving burdens to revive the industry.