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Proposed VAT Hike Sets Off Alarm Bells in Greek Shipping Industry

WTA_Greece_21039The shipping industry warned during the 3rd Posidonia Sea Tourism Forum held in Athens this week that should a proposed tax hike be imposed on Greek tourism then the consequences will be dire for the industry.

“The consequences of a possible VAT increase will have the opposite effect, the significant reduction in tax revenue. If hearsay going around is verified, the implications for shipping will be manifold: the immediate increase in VAT rates will apply to tickets and rates on islands and tourism services,” Greek Passenger Shipping Companies Association (SEEN) President Michalis Sakellis said during his opening address at the forum.

The annual Posidonia event brought together sector professionals to evaluate new investment opportunities and meet industry decision-makers from Greece, the East Mediterranean and the Black Sea.

Mr Sakellis stressed that in order for Greece to return to growth, authorities must look into the causes of the crisis and tackle the problem at its root.

“These causes were never VAT rates, which in our country have always been high,” he added.

Michael Sakellis, President, Association of Passenger Shipping Companies.

Michael Sakellis

Mr Sakellis was also quick to point out that in order for the institutional framework covering shipping to be modernized, the government must accept the private character of shipping companies, must ensure equal treatment for maritime transport compared with other modes of transport, especially air transport, and must exempt maritime transport of public sector obligations and public interventions in their commercial policy.

Referring to the condition of Greek ports, Mr Sakellis said that many of the Greek islands face serious problems, “which are the main cause of losses and hinder the proper execution of our routes”.

He added that modernization projects should be begin immediately.

“Without improvements, our ports will be the main factor leading to a series of poor developments in our island services and negatively affect the cost of travel.”

According to a Foundation for Economic & Industrial Research (IOBE) study for 2014, shipping is estimated at contributing 11.8 billion euros to GDP or 6.5 percent of total GDP. In terms of employment, shipping employs 260,000 people, accounting for approximately 50 percent of employment on the islands and 7.2 percent of total employment.

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