Tax cuts on cross-strait shipping should not hurt HK, experts say

Experts said recent tax cuts by the central government on cross-strait shipping would not significantly hurt Hong Kong shipping, despite a significant jump in Taiwan-mainland shipping since the cuts took effect.

With effect from December 15 last year, the Ministry of Finance in Beijing waived business taxes and corporate income taxes on Taiwan shipping firms' revenues obtained from the mainland.

Container throughput in Kaohsiung, Taiwan's biggest port, rose 7 per cent in December to 653,000 20-foot equivalent units (teu) from the previous month, after an 18.6 per cent drop in November from October, according to official statistics from Taiwan.

The container throughput of Taiwan's ports, including Kaohsiung, was notably higher in the last two weeks of December than the first two weeks.

'The big rise in shipping volume at Kaohsiung in the last two weeks of December may have been partly driven by the tax cuts,' said Charles de Trenck, an analyst with Transport Trackers, a Hong Kong-based transport consultancy.

Direct cross-strait shipping reduced costs by 15 to 30 per cent and cut transit times, the Kaohsiung Harbour Bureau said on its website.

Nonetheless, the tax cuts would have relatively little impact on Hong Kong shipping, Mr de Trenck said.