[photopress:Panama_registry.jpg,full,alignright]Ocean-going ships flying foreign flags of convenience will be given tax exemptions as an incentive to register in the country. Pretty much as from now Chinese-owned ships registered overseas by the end of 2005 will be allowed to register domestically — in Shanghai, Tianjin and Dalian — and exempted from customs duty and import value-added tax for the vessels.
Minister Weng Mengyong said registration in the country will mean improved maritime security and better protection of national interests.
He said sea cargoes account for more than 90% of the country’s foreign trade, 95% of crude oil imports and 99% of iron ore imports.
As shipping fleets continue to grow, the number of Chinese vessels registering overseas is also increasing and now accounts for half of the country’s total international tonnage.
The reason for such a widespread use of flags of convenience is that imported vessels are levied a 27.53% tariff and import value-added taxes. Countries that offer flags of convenience usually charge a small amount in registration fees, but often do not have sound safety supervision systems.
Minister Weng Mengyong said that Chinese-owned vessels flying foreign flags could hurt the healthy development of the shipping industry and national economic security. He said, ‘Lack of adequate safety supervision leads to poor shipping services.’
There are currently 1,920 ocean-going vessels flying the national flag with a capacity of more than 24 million dwt.
Source: China Daily
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