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THE
Maritime Industry Authority (Marina) is reviewing the
country’s ship registry, not with a view to attracting
international vessels to register their vessels in the
country, but to lift some of the provisions which are
deemed uncompetitive in the international market.
Marina
Administrator Vicente Suazo said in an interview that
Philippine-registered vessels cannot compete with their
international peers as a result of the 4.5-percent
withholding tax that the operator pays the government
every month.
The tax
is mandated in the country’s bare-boat chartering law,
which is more than 30 years old.
“Philippine-registered shipping lines cannot compete
with other vessel operators, for example those in
Vietnam, because of the [4.5-percent withholding] tax. In
fact, even other foreign vessels, they don’t pay taxes
in their own country. We’re just the only one,” Suazo
said.
Earlier
in his career as maritime regulator, Suazo said he had
discussed with the National Food Authority (NFA) the
possibility of using a Philippine-registered cargo
vessel, invoking a Marcos-era law, Presidential
Decree 1466, which orders all government entities to use
transportation services only from locally registered
ships.
The NFA,
the country’s biggest rice and grains importer, agreed
with Marina’s proposal, but the plan fizzled out even
before it started since local shipping firms could not
get charter agreements with shippers abroad owing to the
high cost.
Shipping
firms would normally input all their operational costs,
including the 4.5-percent withholding tax to the
government, in their freight rates when bidding for a
shipping project, thus ending up with higher rates.
“They
cannot compete. That is one discouraging factors [why
international vessels are shunning the country’s
registry],” he said.
According to his proposal,
Marina
has drafted an executive order (EO) to replace the tax
with tonnage dues and annual registration fees which,
when combined, are still relatively cheaper than the
current rate.
Also in
the draft EO, foreign-owned ships represented by a
ship-management company duly accredited by
Marina
would be entitled to fly the country’s flag.
Bare-boat chartering is the lease of a foreign ship at a
particular period under the Philippine flag for use
either in domestic trade or foreign trade.
At the
moment, there are only about 168 vessels in the
Philippine registry, a steep decline from 400 during the
’80s.
The
country’s bare-boat charter law was first signed in
1975, which allowed the temporary registration in the
country of foreign-owned ships that were
bare-boat-chartered by Philippine nationals. In 1976 it
was extended to include overseas shipping in addition to
those vessels plying domestically.
Once
registered, the ship acquires international recognition
as a Philippine-registered vessel, entitling it to the
rights of a beneficially owned ship.
Presidential Decree 1711 extended the effectivity of the
original law from 1990 to 1999, after which an EO was
issued extending the life of the said ruling
indefinitely or until a new measure is in place. |
