Low-tax Greek shipowners agree donations to budget

The Hellenic shipowners association on Thursday [18 July 2013] signed an agreement with Prime Minister Antonis Samaras which the government says will bring in about 140 million euros (US$182 million) a year to state coffers.

According to a government statement, 441 shipping companies with 2,769 ships will make voluntary payments. That amounts to about 90% of ships sailing under a Greek flag, and 65% of ships sailing under a foreign flag.

The ministry estimates that the contribution is worth about 75 million euros (US$98.3 million) for the rest of this year and up to 140 million euros in a full year.

"Today's agreement for your voluntary participation in the state budget with 90 percent of the fleet sailing under a Greek flag, and 65 percent of the fleet sailing under a foreign flag, is truly moving," Samaras told the head of the Hellenic Shipowners' Association, Theodoros Veniamis.

"The signing of the agreement confirms the willingness of the shipping community to voluntarily contribute, for three years, to the national efforts in stabilising the country's economy," the Merchant Marine Ministry said in a statement.

Greek shipowners are leaders in their sector internationally and control about 15% of the world's merchant fleet. But only about a third of their fleet sails under the Greek flag.

Greece is going through a sixth year of continuous recession and the people are suffering considerable hardship because of budget reforms in exchange for bailout funding.

This has sharpened resentment against the shipowners because ships registered under foreign flags generate profits in low-tax regimes, and in Greece the shipping sector benefits from special tax advantages.

Earlier this year, the shipowners were forced to accept a tax imposed on vessels sailing under foreign flags.

Greece's merchant marine sector accounts for more than 48% of the country's balance of payments, topping the list between 2009 and 2011, and followed by tourism.

The announcement of the voluntary payments comes after the Greek parliament approved on Wednesday a package of further reforms putting thousands of jobs in the public sector at risk.

Source: AFP