Technical Report No. 8 PORT AND SHIPPING

I-4-2
Vietnam National Transport Strategy Study (VITRANSS)
Technical Report No. 8
Shipping and Ports
transported by national ships and declare this as expenditures which can be
deducted from their fiscal income (Income Tax Rules 1995).
4) Ship depreciation: In Indonesia, the following ship depreciation rule under the
1994 income tax law is applied:
Ship Tonnage (DWT) Class Depreciation %
Less than 100
1
4 years
50
Up to 100
2
8 years
25
100-1,000
3
16 years
12.5
Over 1,000
4
20 years
10
The depreciation term on second-hand vessels is applied using the original
owner’s selected term.
In Malaysia, there are provisions for vessel depreciation and accelerated
depreciation is allowed. Details will be mentioned in the ESCAP report.
In Taiwan, there is no specific policy supporting its shipping industry except
for an exemption from corporate tax. Perhaps, it prefers to follow APEC
maritime initiatives and the Asian shipping forum, supporting a freer and
more fair competition in the shipping industry.
4.1.2 Fiscal Measures in Malaysia
1) Bank Industri: Bank Industri is the first bank in Malaysia to go into the
shipping industry. Until now, their main business is still the financing of ships,
shipyards and marine-related activities. Government, through the Five-year
Malaysian Plan, allocates funds to Bank Industri. Those wanting to apply for
loans for shipbuilding should purchase the vessel from the local shipyard. If
local yards were incapable of building the required vessel, then foreign
purchase would be allowed.
2) Shipping Fund: The Shipping Fund established by government is intended for
eligible local shipping companies who wish to expand and increase their
carrying capacity to meet the growth of export following the rapid pace of
industrialization (Prime Minister’s Speech, 1995).
The two main components of this fund are the Ship Finance Facility (SFF)
and the Shipping Venture Facility (SVF). Initially, when this fund was
established, government, through Bank Nagra, provided a sum of RM 800
million. Bank Nagra then chose Bank Industri as the managing authority of
this fund. Of the government allocation, RM 300 million was set aside for the
acquisition of new and second-hand vessels under the SFF program. The RM
500 million balance was intended for the SVF program (EPU: 1993). Under