Indonesia: Dr Mahathir urges Govt to study taxation mechanism in shipping sector
Friday, 24 February 2012 | 11:00
Former prime minister Tun Dr Mahathir Mohamad has called on the government to study the current taxation mechanism in the shipping sector.
He said this was timely in order to possess a more friendly approach towards the offshore support vessels (OSVs) sector and the shipping industry as a whole.
He said improving the tax legislation would allow and encourage Malaysians to operate OSVs in the country.
"In the end, the government will gain because when these companies gain profit, they would have to pay corporate tax.
"Singapore is currently seen as a more industry-friendly country," he told reporters after launching the Malaysia OSV Owners' Association (OSV Malaysia), here yesterday.
Earlier, OSV Malaysia President Tasripin Masotee said the OSV industry needed a holistic approach from the government by providing a fair level playing field and tools so that the industry can become competitive and market driven.
He said the OSV segment has great potential to contribute significantly to the growth of Malaysia's economy but the country currently possesses unfavourable fiscal and monetary legislations.
"In Malaysia, tax exemption is only applicable to merchant cargo ships and not for vessels categorised as OSVs.
"If we see in the neighbouring country Singapore, it offers fiscal benefits or tax exemption to all OSVs registered in the country and income derived from the operating or chartering of such ships in international waters enjoys tax exemption.
"Operation and maintenance cost is high due to tax. Importation of ship engine spare parts and other equipment for the industry used by OSVs via Malaysian ports or supply base is considered as taxable items," Tasripin said.
OSV Malaysia's membership strength as of January 2012 was 17 companies with a combined fleets of 198 vessels.
The members' combined group revenue is more than RM15 billion, with assets worth more than RM10 billion and some 12,000 employed marine crews.
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