Shipowners hope for tax rebates and grants under Budget 2022
TheStar – Friday, 08 Oct 2021
KUALA LUMPUR: The Malaysia Shipowners’ Association (Masa) hopes that Budget 2022 will provide financial assistance for the shipping industry and tax rebates for vessels built in local shipyards.
It also hopes for grants to comply with the International Maritime Organisation regulations on marine engines (IMO 2020) and for high technology and environmentally friendly marine projects such as alternative marine fuel.
Masa chairman Datuk Abdul Hak Md Amin said the Covid-19 pandemic has affected the maritime and shipping industries and many shipping companies are facing financial difficulties.
He told Bernama that given the current state of the shipping industry, adequate financing funds and facilities must be in place, with a focus on financial assistance to existing shipowners struggling for survival.“I would like to emphasise the importance of allowing other commercial banks to manage the maritime and logistics fund, which is currently managed by Bank Pembangunan Malaysia Bhd, and this is also due to the lack of progress in fund disbursement,” he said.
The maritime and logistics development scheme, which was introduced in Budget 2021 and extended until Dec 31, 2023, is expected to aid in the development of seaports and maritime infrastructure.
Abdul Hak emphasised that the industry needs a competitive financing rate for the shipping industry to be at the same level of playing field with other countries like Singapore, Japan, South Korea and China.
The industry is hopeful for tax relief for vessels built in local shipyards, as well as grants or incentives for high-tech and environmentally-friendly marine projects, such as alternative marine fuel, to comply with the IMO 2020, which mandated a maximum sulphur content of 0.5% in marine fuels globally.
He also proposed that the Danajamin Prihatin guarantee scheme be allowed to support Malaysian shipowners.
Malaysia’s shipping industry is a major contributor to the economy as 90% of the country’s trade is from the sea.
To support the industry’s recovery post-Covid-19, government-linked companies should give more opportunities to local players to participate in their trade activities by using local ships and containing the outflow of funds due to less participation from local shipping players. according to him.
“The exports of palm oil is dominated by foreign ships.
“The government should consider introducing a policy for resident Malaysian companies to export using Malaysian vessels to reduce the balance of payment deficit and, simultaneously, give a chance to our local shipping industry to develop and improve their level of competitiveness,” he added.