Our transport and logistics network
has played a pivotal role in Singapore's development
as a global city of international trade. Today,
the transport and logistics sector contributes
9 per cent to GDP and employs more than 110,000
workers or about 7 per cent of our work force.
As an industry which provides essential support
to our trade sector, it needs to constantly evolve
new and improved services to meet the demands
of the trade. Our continued growth as a global
city of international trade and hub port also
depends critically on the development of a transport
and logistics sector with extensive networks.
To encourage major transport and logistics operators
to further expand their businesses in Singapore
and use Singapore as a base for their operations,
I have therefore decided to introduce the following
tax concessions:
-
Tax Exemption for Income Derived from Uplift
of Freight
Currently, tax is levied on the uplift of cargoes
from Singapore, except for Singapore-flagged vessels
and vessels from countries with which Singapore
has signed a tax treaty. To further boost Singaporeüs
development as an international cargo and shipping
hub, I have decided to exempt non-resident ship
owners and charterers from tax on their freight
uplift from Singapore. This benefit will also
be extended to resident shipping companies and
companies under the Approved International Shipping
Enterprise Scheme. Removal of the tax on freight
uplift would allow shipping companies greater
flexibility in planning their shipping schedules
and operations. The exemption will take effect
from Year of Assessment 1999.
-
Tax Concession for International Freight
and Logistics Operators
Singapore has a long history as the main shipping
and distribution hub in the region. To further
enhance our hub status, I have decided to introduce
a tax incentive to encourage international freight
service providers to expand their activities in
Singapore. This incentive will be available to
ship agencies, ship management companies and logistics
providers. To qualify for the incentive, the company
must have substantial operations and a good track
record in the provision of freight and logistics
services. Companies that qualify will be accorded
a concessionary tax rate of not less than 10 per
cent on their incremental income. The incentive
will be granted for a period of five years and
will take effect from Year of Assessment 1999.
-
Tax Exemption for Income Derived From
Writing Offshore Marine Hull and Liability Insurance
Business
It is estimated that Asian shipping companies
own more than 40 per cent of world shipping tonnage
today. Singapore is well placed to serve the marine
insurance needs of the companies in the region,
particularly in the provision of marine hull and
liability insurance. I have therefore decided
to exempt from tax the income derived by approved
insurance companies from writing offshore marine
hull and liability insurance business for a period
of 10 years. The incentive would allow insurance
companies to tap the insurance potential of the
shipping communities in the region. It would also
complement Singapore's development as a shipping
hub. This concession will take effect from Year
of Assessment 1999.
