On December 27, 2017, the 31st session of the Standing Committee of the 12th National People’s Congress passed the Vessel Tonnage Tax Law of the People’s Republic of China. China’s Vessel Tonnage Tax Law has basically maintained the stability of the vessel tonnage tax collection system and accorded with the basic national conditions of China’s shipping industry. The system established by China’s Vessel Tonnage Tax Law is basically a traditional vessel tonnage tax system, which is different from those implemented by many other countries. This paper explores the reason why China chooses to implement the vessel tonnage tax system and evaluates the policy within a certain scope and from a certain angle. It also examines the shortcomings of China’s vessel tonnage tax system as well as the burden brought by it to the shipping enterprises and puts forward countermeasures and suggestions for reforming and perfecting the vessel tonnage tax system in China.

1. Introduction
 2. Development of China’s Vessel TonnageTax Legislation and Its Reform
  A. Evolution of Binary Vessel Tonnage Tax System
  B. Significant Changes in the Tax Scope, Taxable Items,and Rates of Vessel Tonnage Tax
  C. Promotion of Vessel Tonnage Tax’s Legislative Level
 3. Why does China Choose the Traditional Modeof Vessel Tonnage Tax Law of 2018?
  A. Strengthen and Implement the Principle of Statutory Taxation
  B. Stability of China’s Tax System
  C. National Conditions of Shipping in China
 4. Influence of Vessel Tonnage Tax on the ShippingIndustry and Extraterritorial Experience:A Comparative Perspective
  A. Influence of Vessel Tonnage Tax Law on Chinese Registered Vessels
  B. Influence of Vessel Tonnage Tax Law on Foreign registered Vessels
 5. Deficiency of China’s Vessel Tonnage Tax Systemand Suggestions for Improvement
  A. Deficiency of China’s Vessel Tonnage Tax System
  B. Suggestions for Improving China’s Vessel Tonnage Tax System
 6. Conclusion
 References

• Deyi Ma(East China University)