New Tax Measures Boost Irish Shipping Industry

The Irish Minister for Finance, McCreevy T.D announced a tonnage tax for Ireland in this years Budget. Fahey T.D., Minister for the Marine and Natural Resources, said "the government approval for this unique flat tax rate linked to tonnage will act as a catalyst to regenerate the Irish shipping industry. The industry has been stagnant in recent years and this new tax regime will ensure a more attractive and enhanced fiscal environment. It will offer certainty and clarity for future investment and ensure the industry's competitiveness with those in other member states".

The tonnage tax forms part of a number of initiatives being spearheaded by the Irish Maritime Development Office (IMDO) with the support of government and the industry, these include a radical review of the Irish Register and changes to Irish Mercantile Marine legislation.

Glenn Murphy, Director of the IMDO, said, "Ireland has achieved an enormous degree of success in sectors such as finance, telecommunications and IT. With the support of the Government on issues such as taxation, the Irish Register and our new maritime college, we are now well placed to attract investment from abroad and the ability to develop our own indigenous industry.

A year ago, the IMDO said that radical reform would be needed to halt the rapid decline of the Irish shipping industry. "The industry was on the brink of a complete collapse," Murphy said. "Many of our larger owners, such as Irish Ferries and Arklow Shipping would have been compelled to lower the Irish flag and relocate their core business structures to another country had the tonnage tax regime not been announced this year."

A tonnage tax means that a company is taxed based on the tonnage of their fleet rather than notional corporate profits. The EU strongly advocates this regime and it has already been implemented successfully in Britain, Holland and Germany.

Dr. Peter Heffernan, CEO of the Marine Institute welcomed the announcement by the Minister for Finance he said that it reaffirmed the Governments commitment to developing the Maritime sector."