SAR signs double aviation taxation avoidance agreement with Taiwan

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The local government signed an agreement with Taiwan yesterday to avoid double taxation on the cities’ aviation business. Representatives of the two governments believe the agreement will boost market growth for the Macau-Taiwan flight routes. The agreement – signed yesterday in Macau Cultural Centre – was inked by Nadia Leong Kit Chi, head of the Macau Economic and Cultural Office in Taiwan, and Lu Chang-shui, director general of the Taipei Economic and Cultural Office. “The new agreement, in principle, is effective in perpetuity. We believe the agreement will benefit the tourism industry, aviation businesses and overall economies of Macau and Taiwan,” Ding Pi Lien, the deputy director-general of the department of International Fiscal Affairs of the Taiwanese Ministry of Finance, remarked to reporters on the sidelines of the signing ceremony. Meanwhile, the city’s Financial Services Bureau (DSF) director, Iong Kong Leong, told reporters yesterday that he agrees that the new agreement would boost the growth of aviation in the two markets. Now permanent In fact, the aviation business of the two regions had been guaranteed by a memorandum of the two governments on double aviation taxation avoidance in recent years. The newly signed agreement will replace the MOU of the two regions, which will be permanent and doesn’t need to be renewed. Last year, the two parties signed an ‘open skies’ agreement lifting all restrictions on flights between Macau and Taiwanese destinations, namely Taipei and Kaohsiung. In addition, it enables operators to provide charter flights for the two regions. According to Yeh Kai-ping, the director general of the Department of Hong Kong & Macau Affairs of Taiwan, the flights connecting Taiwan and Macau have increased to 93 flights per week from 75 following the open skies agreement. Currently, four airlines connect the two regions; namely, Eva Air, TigerAir, Air Macau and TransAsia Airways. Market expanding For the first eleven months of this year, the total passenger volume of Macau-Taiwan flights reached 1.44 million, which is up 8.1 per cent year-on-year, according to the official information provided by local airport operator Macau International Airport Co. Ltd. (CAM). Particularly, in November alone, the passenger number for the Taiwan market posted a year-on-year growth of 35 per cent at the local airport. “From 2013 to 2015, we also saw our passenger volume for the Macau-Taiwan market increase by some 20 per cent,” the general manager of the local branch of TransAsia Airways, Kelvin Chen, told Business Daily at the event yesterday. “Long term, the [Macau-Taiwan aviation] market certainly has room to grow. After all, the consumer price index of Taiwan remains lower than that of Macau. Macau people thus like going to Taiwan for shopping and eating. Taiwanese, meanwhile, also like bringing their families to enjoy the luxury hotels in Macau. As such, the market will continue to climb,” Mr. Chen believes. Increasing demand According to the general manager, the airline is planning to resume its frequency for Macau-Taipei routes to three daily flights next year. But its Macau-Kaohsiung route will be reduced to two from three flights per day, while frequency for the Macau-Taichung route will remain unchanged. Another representative of an airline operating in the market, which preferred to remain anonymous, told Business Daily yesterday that the supply and demand for the Macau-Taiwan aviation market are balanced. “Although we keep seeing new competitors entering the market, we target different customers…So we are fulfilling different demands in the market. In addition, competition is good. The increased supply in the market is dragging up demand, which I see benefiting the overall growth of the whole market,” the airline officer claimed.