Japan will apply the tonnage tax system to 10 domestic ocean-going shipping companies over five years from fiscal 2009, which starts in April. The Ministry of Land, Infrastructure, Transport and Tourism made the announcement March 24 after it approved earlier in the day the 10 shipping companies' plans to increase Japanese registered vessels and sailors.
The 10 companies include the nation's three biggest shipping firms -- Nippon Yusen Kabushiki Kaisha (NYK Line), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha, Ltd. ("K" Line). The other companies are Asahi Shipping Co., Asahi Tanker Co., Iino Kaiun Kaisha (Iino Lines), Sanko Steamship Co. (Sanko Line), Shinwa Kaiun Kaisha, Daiichi Chuo Kisen Kaisha and Nissho Shipping Co.
According to the transport ministry, the tonnage tax system is already in place in 17 other countries. Greece, the Netherlands, Norway, Germany, the United Kingdom, Denmark, Finland, Ireland, France, Spain, Belgium, the United States, South Korea, Italy, India, Lithuania and Poland have so far introduced the system in that order.
The Japanese shipping industry has called for an early application of the tonnage tax system to ensure its international competitiveness. The system is expected to have the effect of reducing taxes on shipping firms.
Japan's parliament revised the Marine Transportation Law last year to allow the government to apply the tonnage tax system to domestic ocean-going shipping firms if they submit plans containing numerical targets for increasing Japanese registered vessels and sailors and get the transport ministry's approval for their plans.
The ministry wants to boost the number of Japanese registered vessels and sailors in order to ensure stable transportation of minimum necessary amounts of goods even in emergencies, such as large-scale natural disasters, terrorist acts and political upheavals, in the home countries of foreign sailors.
The number of cheaper foreign sailors on ships operated by Japanese firms is continuing to rise amid increasingly tough international competition in the maritime industry. At present, foreign sailors account for 97% of all seamen on vessels operated by Japanese ocean-going shipping firms.
The number of Japanese sailors has declined to below 3,000. In addition, of about 2,000 vessels currently operated by Japanese ocean-going shipping firms, only fewer than 100 are Japanese-registered.
The 10 shipping firms that will be allowed to pay tonnage taxes plan to more than double the total number of their Japanese-registered ships to 160 within the next five years from the current 76.
These figures include not only ships the 10 firms own alone but also vessels they own jointly with other domestic firms that will not be allowed to pay tonnage taxes. The number of these jointly owned ships has been calculated in accordance with the 10 firms' ownership ratios.
The 10 shipping firms also plan to increase the total number of their Japanese seafarers to 1,138 within the next five years from the current 1,050.
The 10 companies include the nation's three biggest shipping firms -- Nippon Yusen Kabushiki Kaisha (NYK Line), Mitsui O.S.K. Lines (MOL) and Kawasaki Kisen Kaisha, Ltd. ("K" Line). The other companies are Asahi Shipping Co., Asahi Tanker Co., Iino Kaiun Kaisha (Iino Lines), Sanko Steamship Co. (Sanko Line), Shinwa Kaiun Kaisha, Daiichi Chuo Kisen Kaisha and Nissho Shipping Co.
According to the transport ministry, the tonnage tax system is already in place in 17 other countries. Greece, the Netherlands, Norway, Germany, the United Kingdom, Denmark, Finland, Ireland, France, Spain, Belgium, the United States, South Korea, Italy, India, Lithuania and Poland have so far introduced the system in that order.
The Japanese shipping industry has called for an early application of the tonnage tax system to ensure its international competitiveness. The system is expected to have the effect of reducing taxes on shipping firms.
Japan's parliament revised the Marine Transportation Law last year to allow the government to apply the tonnage tax system to domestic ocean-going shipping firms if they submit plans containing numerical targets for increasing Japanese registered vessels and sailors and get the transport ministry's approval for their plans.
The ministry wants to boost the number of Japanese registered vessels and sailors in order to ensure stable transportation of minimum necessary amounts of goods even in emergencies, such as large-scale natural disasters, terrorist acts and political upheavals, in the home countries of foreign sailors.
The number of cheaper foreign sailors on ships operated by Japanese firms is continuing to rise amid increasingly tough international competition in the maritime industry. At present, foreign sailors account for 97% of all seamen on vessels operated by Japanese ocean-going shipping firms.
The number of Japanese sailors has declined to below 3,000. In addition, of about 2,000 vessels currently operated by Japanese ocean-going shipping firms, only fewer than 100 are Japanese-registered.
The 10 shipping firms that will be allowed to pay tonnage taxes plan to more than double the total number of their Japanese-registered ships to 160 within the next five years from the current 76.
These figures include not only ships the 10 firms own alone but also vessels they own jointly with other domestic firms that will not be allowed to pay tonnage taxes. The number of these jointly owned ships has been calculated in accordance with the 10 firms' ownership ratios.
The 10 shipping firms also plan to increase the total number of their Japanese seafarers to 1,138 within the next five years from the current 1,050.