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Shipping’s contribution to the Greek economy

Legislative reforms recently made to the Greek shipping tax law illustrate the industry’s contribution to the country’s welfare as well as boosting the attractiveness of the Greek shipping industry, according to financial consultants, PwC Greece.

PwC says that among other reforms, the new Voluntary Contribution agreement between the Greek shipping community and the Greek government -- adding a minimum $45m to the national coffers annually -- and the latest modernisation of the tonnage tax regime by means of the equalisation of the tax treatment of the shipowning companies to bareboat charterers and lessees, illustrate the recognition of the contribution the shipping industry is making to the Greek economy.

In parallel, the introduction of key tax incentives has boosted the attractiveness of the Greek shipping industry.

Discussing trends and current challenges with Greek shipping professionals recently, PwC Greece’s Christina Tsironi, manager, tax and legal services, said: “The enactment of a favorable tax regime for the executives and employees of both chartering and ship management companies could be viewed as a strong asset to the reinforcement of the Greek shipping market and the enhancement of the attractiveness of Greece as a location for shipping operations.”

Indeed, Bank of Greece (BoG) governor, Yannis Stournaras, has said Greek shipping and its related activities is a highly extroverted sector which has traditionally been a dominant force in the Greek economy, effectively addressing challenges both internationally and nationally.

“Shipping receipts were and are necessary to cover a large part of the country's external financing needs,” said Stournaras.

According to the BoG, revenues from shipping in 2015-2018 exceeded - on average - over $13.5bn annually, about 6.8% of GDP, representing 37% of total balance of service receipts. During the same period, net receipts (minus payments) were, on average, around $7.5bn a year and covered about 32% of the goods balance deficit.

“The upward trend in maritime transport receipts in 2017 and 2018 continued into 2019 and available data for the first seven months of 2019 shows maritime transport receipts increased 7%,” says the BoG governor.

Stournaras also stressed the role shipping people play through their investments in the Greek economy in sectors related to shipping, such as shipyards, or beyond. He says this investment activity can be further enhanced, in particular after the now lifted restrictions on capital movements, and given the low return on investment in the global economy in general.

“The attraction of more commercially managing ships in Greece, as well as the expansion of maritime cluster services, including shipyards, could increase the contribution of shipping to the GDP and enhance the extroversion of the Greek economy. It is a unique achievement for a country the size of Greece to be a world leader in shipping,” said Stournaras.

TAGS: Europe
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