DOMESTIC shipping industry players expressed enthusiasm with the nearing approval of the Domestic Shipping Development Act of 2002. Presently at the bicameral committee, the bill seeks to grant tax perks and incentives to shipping operators and ship builders; help accelerate investments in the shipping sector; and increase and improve the aging domestic fleet.
Solid Shipping Lines general manager Quirimon Tan said the DSDA will put struggling shipping operators in a better position to modernize their fleet at a “friendly” cost. “It will definitely be good for the business and for the industry in general,” he said. Despite the many revisions the bill has undergone, Tan said the proposed legislation’s ultimate objective remains the same – to level the playing field. “Some incentives in the original draft are no longer there. ButÉ that’s better than nothing,” he said.
Lorenzo Shipping vice president for Logistics Felicisimo Salda–a cited the tremendous savings ship owners will enjoy once the tax exemptions take effect. Under the bill, ship operators will no longer have to pay for the transfer tax, documentary stamp tax, compensating tax, duties, charges, royalties, registration fees, licenses and other fees in the transfer of vessel ownership to another domestic ship operator. “Importation of vessels, even second-hand ones, is very expensive. With these tax perks, ship owners will be encouraged to invest in much-needed new vessels, replacing the old ones which are often the cause of maritime accidents,” he noted. Ship builders and repairers will also get tax incentives and may avail of credit financing through MARINA. Ban on imports
In addition, the bill ensures continued business for the shipbuilding and ship repair industry as it bans vessel importation within ten years from effectivity of the Act provided domestic shipyards can sufficiently cater to local needs. Metro Manila Shipyards Association, Inc. president Lambert Sianghio said shipbuilders and repairers at present bear the high cost of importation of capital equipment, machinery, spare parts, life-saving and navigational equipment and other materials used in the construction, repair, renovation and alteration of merchant marine vessels in the domestic trade. “Imported materials roughly constitute 80% of the total.
We have no one to turn to… even the government cannot give us any subsidy,” he said.
