Hi Blog. Asahi Shinbun reports that foreign nationals account for more than 90 percent of crews of ocean-going vessels operated by Japanese companies. So the transport ministry plans to offer tax breaks to shipping companies which drastically increase the percentage of Japanese crew on their ships. This in order to “secure stable maritime transportation”–in case they have an emergency in their home country and suddenly create a labor shortage for Japan…???
Uh… I don’t see the connection. Now NJ crew are threatening Japan’s ships too? How silly. Once again, Japan’s industry cuts costs by hiring cheap foreign labor, and somehow finds itself in a predicament–warranting tax benefits? Smells like porkbarrel to me. Just bring up arguments of “self-sufficiency” and “security” (this time coupled with a fear of foreigners who might NOT be available) and watch the public purse strings fly open. Article follows. Debito in Upstate NY
Move eyed to raise Japanese crew numbers
05/22/2007 THE ASAHI SHIMBUN
The transport ministry plans to offer tax breaks to shipping companies which drastically increase the percentage of Japanese crew on their ships, sources said.
The Ministry of Land, Infrastructure and Transport aims to increase the number of Japanese crew members by about 50 percent in 10 years to secure stable maritime transportation, an integral part of the nation’s trading infrastructure.
Foreign nationals account for more than 90 percent of crews of ocean-going vessels operated by Japanese companies.
This is because shipping companies sharply cut back on labor costs to survive competition with overseas rivals.
In 2005, the nation’s shipping companies only employed 2,625 Japanese as crew members. Of the roughly 2,000 vessels operated by the nation’s shipping companies, only 95 were registered in Japan for taxation purposes and other reasons.
The transport ministry’s move was prompted by concern there would be too few people to operate ships if natural disasters, political turmoil or other emergencies flared in the home nations of non-Japanese crew members.
According to the ministry’s estimates, to maintain a basic level of operations in the event of an emergency, 5,500 Japanese crew members and 450 vessels registered in Japan would be necessary.
Beginning in fiscal 2008, the ministry plans to require shipping companies, including Nippon Yusen KK and Mitsui O.S.K. Lines Ltd., to come up with plans to hire more Japanese crew members, including specific targets.
The shipping companies will be required to prepare 5-year or 10-year plans based on the ministry’s targets. The ministry will then examine the plans for final approval.
If a shipping company fails to hire more Japanese as it had planned, the ministry will instruct it on what to do. A company that fails to win ministry approval will become ineligible for the new taxation system, which the ministry expects will be introduced in fiscal 2008.
The new system means companies would be taxed on the total tonnage the shipowner operates instead of actual profits.
The system, already used in 16 other countries, is expected to enable shipping companies to save significant amounts on tax when business is good.
The transport ministry must still negotiate with the Finance Ministry on final implementation of the new system.
It plans to submit its requests in September.
The transport ministry initially had considered introducing a requirement on shipping companies to use the money saved under the new system solely for measures to secure Japanese crew members.
But the idea was scrapped after shipping companies and their client firms raised concerns about higher transportation fees and weakened competitiveness.
In Britain, shipping companies have to provide training for their employees to take advantage of tax breaks.
The Japanese Shipowners’ Association, which represents shipping companies, has already announced a plan to double the number of Japanese-flagged vessels in five years and increase the number of Japanese crew members by 50 percent in 10 years.
(IHT/Asahi: May 22,2007)