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Shipping industrialists will get away with tax increases

25 June 2012 / 16:06:11  GRReporter
2396 reads

Victoria Mindova

"Ships have propellers and they can leave the port quickly," the new Minister of Merchant Marine Kostis Moussouroulis replied concisely to GRReporter’s question of whether he supports the change in taxation for shipping industrialists. Despite the deepening crisis and the declining revenue in the treasury, shipping companies are still being taxed at the lowest rate in Greece. High taxes and extra charges on the income of ordinary taxpayers, combined with the deepening recession, have made the tax breaks for shipping industrialists a thorn in society’s side. "We will surely not tax with 500 thousand euro any ship in Greece, as the political opposition (SYRIZA) had promised before the elections," said the Minister.

For many years, there has been controversy about how much and what this type of contractors should pay the state in Greece. The facts are that the contribution of shipping to the economy of Greece is approximately 6% of GDP and approximately 600 thousand jobs depend on it. Although Greece is currently experiencing one of the worst periods in its modern history, it seems that this government will not dare to levy a high tax on shipowners. They proved to be one of the few favoured categories who are in a position to state to the government (whatever it is) that if it dares to burden them with new taxes, they will relocate their business in countries with a more favourable tax climate.
"We need to find the right balance and understanding between the interest of the state and the ability of business in order for a measure to bring a positive result. This also applies to taxation," Deputy Minister of Merchant Marine George Vernicos said on the topic. He believes that a dialogue could lead to some concessions, but he is clear that above all, the government has to keep the shipping business within the country.

At the first meeting with media representatives in their new roles, Minister Moussouroulis and Deputy Minister Vernicos said they intend to draw up a 10-year plan for the modernization and development of seafaring, trade and related infrastructure. "I prefer to improve the existing infrastructure rather than build a new one," Vernicos shared his personal preferences. The Minister declared his support for the privatization processes of port infrastructure and services related to maritime transport and tourism. On Thursday, the Minister will visit the state property management fund to examine the privatization programme related to his ministry. "There are different ways to privatize state property and I prefer concession contracts," he explained.

"Let us not forget that in order for Greece to attract investors' interest today we must first regain investors' confidence. This will happen if they consider the country stable. The main step in this direction came with the formation of the government," the Deputy Minister added. He said unless foreign investors consider Greece a country of long-term stability, privatization cannot start.

Quite a few ferry lines to the smaller islands have closed in the last two years due to the growing financial problems of the state and the reduced passenger traffic to some destinations. Experts say this was mainly due to the high cost of fuel, which has increased the costs of passenger ships and made the services unprofitable. Despite the obvious difficulties in keeping some destinations, the Minister said, "I guarantee that none of the islands will be left without transportation." He relies mainly on the development of a programme for the opening of private transport companies to carry out small courses between the islands and cover the needs of local residents in the destinations unprofitable for large companies.

Tags: EconomyMarketsShipping industrialistsGreeceTaxationTax breaks
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