Tax waiver extended to enhance Singapore port's attractiveness

By Desmond Wong, Channel NewsAsia
08 January 2009

SINGAPORE: The government is extending a waiver on tax for the purchase of Singapore-flagged vessels.

The waiver of withholding tax on overseas interest payments to finance the vessel purchase will be extended for another five years.

Previously, the waiver applied only if two ships were purchased. But now, a single vessel of 40,000 net tons or more will qualify for the waiver.

The waiver extension is aimed at increasing Singapore's attractiveness as a base for ship owners.

This and other measures were announced by Transport Minister Raymond Lim at a cocktail reception organised by the Singapore Maritime Foundation on Thursday.

Industry players welcomed the tax waiver extension, saying it will make Singapore a popular choice for ship owners once the global economy recovers.

S S Teo, chairman of Singapore Maritime Foundation, said: "Things are difficult and ship financing is not so easy to find, but eventually, ship financing will come back, and trade will resume. It's good that we announce such a scheme so that when shipping eventually recovers, we can capture the opportunities."

Singapore, one of the busiest ports in the region, has also reported an 11.1 per cent improvement in shipping tonnage to a record 1.6 billion gross tons in 2008.

The transport minister said this reflects the long-term strength of the fundamentals in the maritime industry.

"The long-term fundamentals of the maritime industry remain strong. There is no substitute for shipping as more than 90 per cent of world trade is transported by sea. Once the global economy improves, we can expect the maritime sector to resume its steady growth," he said.

And it looks like it is still full steam ahead for Singapore's maritime industry, with a slew of activities like the Singapore Maritime Week lined up for the year ahead.

- CNA/ir