China: High tax stifles aircraft leasing business

Updated: 2011-09-01 17:54

By Zhi Yun (chinadaily.com.cn)

High taxes and a complex approval procedure are restricting the development of the Chinese aircraft leasing industry. The conditions are limiting when compared to aircraft industries in other countries, China Business News reported on Sep 1.

According to the Civil Aviation Administration of China, currently over 30 percent of aircrafts in China rely on leasing from Chinese distributors. With the fast development of China's aviation industry, the annual leasing value is predicted to exceed $10 billion in the next five years, the paper said.

However, for most Chinese airline companies, the 21.42 percent tax for leasing an aircraft is higher than the tax for buying imported aircraft, which is only 5 percent.

The approval process for introducing new aircrafts into aircraft leasing companies is also very complicated, adding more risks to the newly generated industry in China, said the paper.

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