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VIII. TAXATION AND OTHER FINANCIAL ASPECTS
To ensure the success of the new register and not to turn away shipowners, the shipowning business should be exempted from profits tax. (IST)
The profits derived from shipowning should be exempted from tax. However, the Register's operations must be financed and reasonable contribution should be made by shipowners for the purpose.
If a first registration fee and an annual tonnage charge are imposed, calculated in both cases on the net tonnage of the vessel, the Register will be self-financing and should generate a surplus. This surplus can be used by Government for the advancement of the shipping industry in Hong Kong as a whole and will thus benefit Hong Kong and its people.
Charges levied on the ship, instead of owners' profits being taxed, will be acceptable to Hong Kong Shipowners as that is the basis on which many ships now owned by Hong Kong owners are treated. From Hong Kong's point of view, it would be far better that the payments now made by shipowners to other governments in the form of fees and charges will in future be made to the Hong Kong Government or its statutory authority.
Government must recognize that few shipowners will register their ships in Hong Kong if they believe that a future Financial Secretary will take the opportunity to change the rules, having attracted substantial numbers of ships to the Register. It is therefore suggested that a guaranteed exemption be given that there will be no taxation on the profits derived by a shipowner from the operation of the ships for at least the period during which Hong Kong as an SAR is to retain its autonomy. (HKSOA)
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