Greece’s top shipping lobby on Thursday rejected a European Commission call for the government to reform its shipping tax system, saying this could hurt a key driver of the crisis-hit economy.
Shipping is a vital generator of income for Greece, accounting for about 7 percent of its gross domestic product and employing about 200,000 people.
Last month, the Commission urged Athens to better target its tonnage tax system, citing competition and EU state aid rules.
But Greek shipowners, who are increasingly worried the Commission’s suggestions could hurt a sector already battered by the global slump in demand for dry freight commodities and record low freight earnings, rejected the proposals.
“There is no effective distortion of competition in the maritime field in the EU,” the Union of Greek Shipowners said.
“Any fundamental changes to the institutional and fiscal framework in which the Greek shipping community is presently operating, would have unforeseeable consequences which would be detrimental not only for Greece but also for the rest of the EU.”
On Dec. 21, the Commission said it was “concerned that favorable tax treatment is also extended to maritime sector intermediaries and operators of ships, which do not provide maritime transport services” such as insurance intermediaries and maritime brokers, as well as the shareholders of shipping companies.
Fishing vessels, port tugboats and yachts should pay a standard income tax, it added giving Greece two months to inform the Commission whether it agreed on the proposed measures.
If Athens consented, the Commission would confirm it in a new state aid decision and the new rules would come into effect from January 2019 at the latest, the Commission said threatening otherwise to open a formal state aid investigation.
But the union warned that the proposed measures may encourage relocation of companies outside Europe.
“The EU may lose a substantial part of its fleet and maritime cluster,” it said.
(Reporting by Renee Maltezou, editing by Jonathan Saul and David Evans)