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Greek shipowners slam 'unconstitutional' triple taxation

Greek shipowners slam 'unconstitutional' triple taxation
Greek shipowners in Piraeus and London have slammed the Athens’ government’s latest ship tax legislation as a triple tax and “unconstitutional”.

Indeed, Union of Greek Shipowners’ president Theodore Veniamis said on 5 February the "UGS has not reacted to the legislation in question, because it wants to give the state time to reconsider its actions and the consequences".

Veniamis, condemned imposition of a new mandatory tax passed through parliament 22 December as upsetting a double taxation deal hammered out last summer between shipowners and the government with Prime minister Antonis Samaras taking an active part in "a constitutional deviation”.

Addressing the 5 February UGS agm, Veniamis said the government’s decision was "a tripling of shipping’s taxation for the next three years" and that it "violates the constitutional protection provisions of Law 27/15".  He said: ”It is a constitutional deviation”.

Veniamis' comments came in the wake of those made 23 January  by Haralambos J. Fafalios, chairman of the London-based Greek Shipping Cooperation Committee, who also said while speaking in London’s Baltic Exchange that the higher tonnage tax was "unconstitutional" and feared it "could have very significant long term ramifications" for the Greek flag.

Veniamis accused Greek Finance Minister Yannis Stournaras, of being responsible for upsetting the longstanding foundation on which the country’s shipping industry is built.

Veniamis and Fafalios both warned of the breakdown in trust and cooperation between the government and the maritime community. Veniamis declared: "A negative climate has been created for any type of business investment in Greece, since the legal stability of the institutional framework is a prerequisite for any prudent investor.”

However, Veniamis said he is confident the government, which “has a vision for the recovery of Greece”, would not want “under any condition to drive shipping away, which would reduce its existing links with the country".

Veniamis said “the international climate for shipping remained unfavorable due to the oversupply of tonnage in the volatile freight market and the difficulty of accessing credit from the banking system.” However, he said “2014 is emerging as more promising, and the source of our optimism is the emerging markets and the developing economies, as we are always looking to return to the basic principle of smooth operation of shipping, the balance between supply and demand".

He said, “The sustainability of any maritime fleet depends on its competitiveness and ability to address the difficult trading conditions prevailing in the global economy".

Referring to the summer 2013 agreement reached on “payment of a voluntary tax, Veniamis said: "To date almost 3,000 ships, representing the overwhelming majority in tonnage terms, have committed through this procedure to the voluntary doubling of their taxes."

Greece's shipping industry is constitutionally protected and has for a number of years stood at the top of world tables and Veniamis noted it accounts for 16.25% of the world fleet while 46% of the EU fleet's dwt is in Greek hands.

"We control 23.5% of the world's tanker fleet and 18.5% of the dry bulk fleet," said Veniamis, also pointing out Greek owners have 372 newbuilding orders outstanding.

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