ATHENS—In its negotiations with international creditors, this
seafaring nation says now it will do what it has resisted doing for
years—raise taxes on its globe-spanning shipping industry.
And that has put the sector in a spin.
"Greek owners will do what needs to be done to stay
competitive," said Michael Boudouroglou, who runs Greece-based, New
York-listed Box Ships Inc. and Paragon Shipping Inc., with a
combined fleet of 25 container and dry-bulk vessels.
As part of bigger talks over a possible debt financing deal with
its international creditors, Greece has said it is willing to
increase tonnage tax for Greece-based shipping companies, and will
consider cutting other special tax advantages the industry has long
enjoyed.
Those benefits include no taxes on profits from shipping
operations, and no taxes on ship sales. Over the years, that has
helped keep a big chunk of the global shipping industry based
here.
Greek owners operate almost 20% of the global fleet of merchant
ships, and more than half of the European Union's fleet. The
industry makes up 7.5% of the Greek economy and employs around
200,000 people.
But it has also been in the cross hairs amid the current crisis.
Greek shipowners have already offered to voluntarily pay an
additional €420 million ($468 million) in tonnage tax from 2014 to
2017. Under fresh pressure by its creditors, Athens now says that
isn't enough. It now plans not only to further increase the tonnage
tax, but also gradually withdraw the special tax breaks.
Several owners said over the weekend that if the new increases
come into force, they plan to set up operations in other shipping
capitals such as London, Singapore and Dubai.
Over the years, countries such as the U.K., Ireland and Cyprus
have tried to lure Greek owners, moving to boost their dwindling
national shipping registries.
"I am in Greece because I love my country, but I won't stay
around to see my business being ruined," said one owner of a big
Greek tanker fleet.
J.P. Morgan analyst Noah Parquette wrote that any new taxes on
shipping companies "would likely force many shipowners to set up
outside the country, negatively impacting the economy and
potentially disrupting a tradition of shipping in Greece that goes
back thousands of years."
Write to Costas Paris at costas.paris@wsj.com
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