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Trans-Asia Shipping Lines received from the Fiscal Incentives Review Board approval notice for tax perks on the operation of a P1.5-billion ship
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Perks include four years of income tax holiday, five years of enhanced tax deductions, and 11 years of import duty exemptions
Cebu-based Trans-Asia Shipping Lines Inc. received on March 17 a notice of approval of application for tax incentives involving operation of a roll-on/roll-off (Ro-Ro) vessel.
In a regulatory disclosure, Trans-Asia parent firm Chelsea Logistics and Infrastructure Holdings, Inc. (CLC) said the notice was dated March 16.
The Fiscal Incentives Review Board (FIRB) had already said on March 15 it approved a set of tax incentives for Trans-Asia’s proposed operation of its P1.5-billion Cebu-based ship, the MV Trans-Asia 21.
The grant includes four years of income tax holiday, five years of enhanced deductions, and 11 years of duty exemption on importations.
Trans-Asia is a Cebu shipping company that transports passengers and cargo on its roll-on/roll-off passenger ferries and cargo vessels. The shipping line was acquired in 2019 by CLC.
MV Trans-Asia 21 is a newly built steel-hulled Ro-Ro vessel that was delivered last year. It was acquired in line with the domestic shipping industry modernization program of the Maritime Industry Authority.
“The new shipping vessel sails the Cebu-Cagayan de Oro route on a reduced travel time and still comparable rate, setting itself apart in the market as a convenient, cost-friendly, and competitive inter-island vessel in the country,” FIRB said.
Finance Secretary and FIRB chairman Carlos Dominguez III said the tax incentive approval “aligns with the national government’s aim to modernize transportation and to increase competition in the shipping industry in the Philippines.”
Trade Secretary and FIRB co-chair Ramon Lopez supported the approval, saying the project “will continue generating revenue for the government even after the incentive period, which is a substantial economic benefit the FIRB considers in granting tax incentive applications.”
Lopez noted there are a limited number of shipping lines serving the Cebu-Cagayan de Oro-Cebu route, “thus, the entry of a new player will contribute to enhancing the competitiveness of the region’s water transport with a focus on passenger safety, welfare, and comfort.”
According to Trade Undersecretary and BOI managing head Ceferino Rodolfo, potential benefits from the project will outweigh the cost of granting the incentives, primarily driven by additional revenue from the activity and substantial domestic spending on direct materials.
With increased access to sea transportation, the project is expected to stimulate greater flow of goods and services between the cities of Cebu and Cagayan de Oro, Rodolfo said.
Apart from increasing productivity and enhancing the efficiency of the transport of goods and services, the new shipping vessel seeks to stimulate industry linkages and agricultural trade between Central Visayas and Northern Mindanao, FIRB said.
