Local shipbuilders seek tax perks, funding access

By Justine Irish D. Tabile | BusinessWorld
February 20, 2023


DOMESTIC shipping businesses are seeking the government’s help to support the projected rebound of the maritime industry from the pandemic through tax incentives and accessible funding.

“If they can give incentives to foreign ship businesses, bakit hindi nila ibigay sa (why can’t they give the same to) local shipbuilders?” said Gaudencio C. Morales, president of the Philippine Association of Coastal and Inland Water Ferries, Inc., on the sidelines of the Expo Maritime Philippines 2023 on Thursday.

Separately, Worldwide Maritime Operations Co. President and Chief Executive Officer Rachelle B. Lopez said: “We are very positive about the maritime industry after the pandemic. And this is why the domestic owners are asking help from the government to help them rebound.”

“What we are asking for is some support from the government in terms of our taxes and loans,” she added.

During his presentation, Mr. Morales asked the government to incentivize the shipbuilding and ship repair (SBSR) industry by establishing a special economic zone (SEZ).

“So ’yung mga i-import na materials na duty-free, doon na babagsak. Tapos ’yung mga local buyers doon na bibili (This should be where the duty-free imported materials will be co-located. And this is where the local shipbuilders will buy from),” Mr. Morales said.

Mr. Morales also said that by establishing an SEZ, the government can help in easing the process of getting imported raw materials and help the local shipbuilders avoid importation taxes.

“Kung mawawala itong taxes, makagagawa ako ng vessel ng less costly (If these taxes will be removed, I will be able to build a less costly vessel). They can just provide us incentives so that our tax duties will be lessened,” he said.

In terms of getting funding, Ms. Lopez said that the company had asked various banks and lending institutions in helping startup shipbuilders.

“We talked with several banks to help them to be one of the allies of the [domestic shipping owners]. Na sana kahit papano pagbigyan naman nila (That somehow, they will give these small businesses a chance),” Ms. Lopez said.

Mr. Morales said that the government should immediately implement the 2022 Strategic Investment Priority Plan which will put shipbuilding on the list of investment priorities under the Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE law.

Investment priorities under the CREATE law can have incentives such as income tax holidays, special corporate income tax, enhanced deductions, duty exemptions, and value-added tax exemptions.

“I have a good outlook for the domestic maritime industry. This is the best time to invest and enter the SBSR industry because of the supply and demand,” Mr. Morales said.

“The demand of shipyards for SBSR is big. Marami ngayong pila ng mga barko na naghihintay ng berth para maka-drydock (There a lot of ships that are waiting to berth for dry docking) which is a requirement of Marina,” he added, pertaining to Maritime Industry Authority.

“Kung malaki ang demand for drydocking sa shipyards, maganda ang (If the demand for drydocking in the shipyards, then we can have a positive) outlook for the industry,” he added.


Source: https://www.bworldonline.com/corporate/2023/02/20/505647/local-shipbuilders-seek-tax-perks-funding-access/