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Greece Eyes Cargo Tax On Shipping

Strapped for cash in a crushing economic crisis, Greece is planning to go after its vaunted nearly tax-free shipping industry with a cargo tax on merchant marine shipowners that the government said could bring in $258.5 million from 2013-16.
Greece’s shipping industry, the largest in the world, has largely gone without paying taxes or monies in lieu of taxes for fear it would leave for another country, although many companies already have headquarters in New York and elsewhere. Greek ships also fly flags of convenience of other countries to avoid paying taxes in Greece.
The tax law change would come as a result of pressure from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up $325 billion in two bailouts and ordered austerity measures in return, as well as demanding the government chase tax cheats and find other ways to raise revenue. The newspaper Kathimerini reported the proposal was forthcoming.
The head of the Hellenic Shipowners Association, Theodoros Veniamis, recently stated that Greek shippers understand the severity of Greece’s fiscal woes and are willing to contribute to the national effort via tax revenues that the country needs. The current law provides for Greek-flagged ships to be taxed according to their capacity, while companies with ships under foreign flags are not taxed as their profits come from activities outside Greece.
Shipowners have also said they would build larger fleets, provided that the Merchant Marine and Aegean Ministry accelerates the procedures for reducing bureaucracy in registering ships and makes moves to bolster the competitiveness of the Greek flag.
According to an unpublished study by a Greek research institute, between 2000 and 2011, shipping contributed a total of nearly $200 billion in receipts from its services, but about half of that money has been re-exported abroad because of lax Greek regulations.
That amount that that shipping has secured is equal to about half of the country’s public debt and is almost four times the total amount of funds that the EU has allocated to Greece in the funding periods from 2000 to 2006 and from 2007 to 2013 that add up to some $59.4 billion.

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