Greece’s Creditors Propose Targeting Shipping Sector Taxes

By Matthias Sobolewski and Jonathan Saul

BERLIN/LONDON, June 26 (Reuters) – Under the newest proposals made by Greece’s collectors, the nation’s transport corporations face paying a better tonnage tax and a phasing-out of particular tax allowances which they’ve loved, based on paperwork seen by Reuters.

Together with tourism, its transport business is a crucial generator of revenue for Greece.

The present taxation system has included voluntary funds by the transport corporations and homeowners who embody among the nation’s wealthiest tycoons.

According to an official doc indicating steps Greece should take, its lenders say the nation should “increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry.”

A separate doc confirmed Greece had made a proposal to “increase tonnage tax and implement an effective taxation framework for commercial shipping.”

Any try and impose heavy taxes after a long time of relative fiscal freedom raises the chance of an exodus of oligarchs and companies that are main employers, additional damaging an financial system that has endured years of disaster.

“There are going to be serious implications for the commercial shipping companies in Greece if such an increased tonnage tax will be applied because they will not be competitive any more in the international market under heavier taxes,” one Greek transport business supply stated.

Greek Prime Minister Alexis Tsipras accused worldwide collectors of “blackmail” on Friday after euro zone companions supplied to launch billions in frozen support in a last-minute push to win his acceptance a cash-for-reform deal.

While Greek transport magnates usually function from the Athens suburbs and the port of Piraeus, their corporations are largely registered within the likes of the Marshall Islands and the Turks & Caicos. The corporations are sometimes listed on inventory exchanges overseas and their ships fly international flags resembling Liberia’s.

Another Greek transport supply stated the Greek tonnage tax system was already larger than in different European international locations.

“Moreover, it has a wider scope as it applies not only to vessels under the Greek flag, but to all vessels managed by Greek management companies,” the supply stated.

Greek transport has been a part of the nationwide financial lifeblood for hundreds of years, however the business stays cell. The Greek fleet, which incorporates Greek flagged ships, is likely one of the greatest on the earth.

“The owners have no problem at all to relocate. If it is not to their liking, no one can stop them from leaving. (The ruling party) Syriza will be gambling with this,” stated John Faraclas, a London-based transport commentator and impartial ship dealer.

“The problem is the loss there will be for the Greek seafarers and Greek society.”

Theodore Veniamis, head of the Union of Greek Shipowners (UGS) who speaks on behalf of the affiliation, was unavailable for remark, his workplace informed Reuters on Friday.

In its latest annual report the UGS stated the nation’s shipowners had already agreed to the doubling of taxation of all ships operated from Greece regardless of their flagging.

“The immediate and direct response of the overwhelming majority of the Greek shipping community fulfilled the tax collection targets for the first year and has undoubtedly proven the determination of our sector to support our country during the economic crisis,” the UGS stated. (Additional reporting by George Georgiopoulos and Michele Kambas in Athens, writing by Jonathan Saul,; Editing by Pravin Char, Greg Mahlich)