THE FISCAL TREATMENT OF SHIPPING.

The purpose of this paper is to show how the effects of fiscal and financial arrangements on the incentive to invest in ships can be calculated and to compare different arrangements. Needless to say the paper is not exhaustive, but it does at least cover those fiscal arrangements which are operative, have operated or might be regarded as possible for a British Government to adopt, and those financial arrangements which are most common in the shipping industry. The paper, deals with such fiscal measures as corporation tax, investment grants and free depredation allowances, and financing by retained profits and loan capital. In doing so it builds on previous work in this field. Of necessity the paper assumes the ultimate effects of fiscal regimes fall entirely upon the shipowning companies concerned: that they can neither be passed back to suppliers nor onwards to consumers. As long as people are concerned with fiscal regimes affecting a small proportion of the world fleet, this seems reasonable. Moreover, in the general field of the final incidence of corporate taxation there has been much study and little agreement. In addition income tax on dividends has been assumed to be a burden on the shareholders and not the company.