The existing system taxes profits at 28 percent, with a further 10 percent secondary tax based on dividends. Now, however, with the introduction of the tonnage tax bill -- a taxation system used by the majority of maritime nations, and preferred by ship owners - officials hope SA will be able to re-enter the multi-billion-dollar industry. The tonnage tax model allows vessel owners to pay a fixed tax rate, based on the size of the ship and the number of working days.
"The research and consultation process has been finalised. The tonnage tax regime will kick-in in 2013. We hope this will attract merchant vessels back into the country," SA Maritime Safety Authority chief executive Tsietsi Mokhele told AFP. Companies like Safmarine, Grindrod and Ocean Africa Container Lines - who have strong local ties, have opted for foreign registers. Safmarine vessels, for example, are flagged in Belgium, Britain, Hong Kong and Singapore, even though South Africa makes up about 40 percent of the company's activities in Africa. The Copenhagen-headquartered cargo carrier had expressed concern at the delay in the implementation of reforms, saying "it was not economically viable to register ships under the South African flag", The New Age says.
Read the full article on www.thenewage.co.za.
