Call to remove levy from ships registered under SriLankan flag

Hiran H. Senewiratne

SHIPPING: Stakeholders in the shipping industry urged the Government to remove the Port and Airport levy of 2.5 per cent from ships that register under the Sri Lanka flag.

The levy prevented local and foreign ship owners to register under Sri Lanka's flag losing foreign exchange to the country.

If any shipping line registered under the Sri Lankan flag, they will have to pay the Port and Airport levy charges of 2.5 per cent. This discourages most of the local ship owners and prospective foreign vessels to register under the Sri Lankan flag, Director of Merchant Shipping, Shantha Weerakoon said.

He said that they are in the process of discussing with the Sri Lanka Customs and Ministry of Finance to remove the levy from ship owners.

'Sri Lankan sea areas also find it difficult to find employment in Sri Lankan flag held ships as they are subject to the Pay As you Earn Tax (PAYE). This is also a problem that needs to be addressed soon', Weerakoon said.

Sri Lanka Association of Ship Owners (SLASO) sources said that money that have been collected from the levy, has not been utilised for the development of the industry.

They also requested the Government to do away with the Port and Airport Tax.

If the Government removes the tax component a lot of foreign and local vessels will register under the Sri Lankan flag, which would ultimately be able to earn foreign exchange to the country, member of the SLASO, Capt. Ranjith Weerasinghe said.

He also said that the Merchant Shipping Act should be amended since it imposes the same rules and regulations for foreign going vessels and coastal operation vessels.

He stressed the importance of having a two-tax regime for both operations on par with international conventions.

Under this current tax regime of Port and Airport levy, Sri Lanka is in a disadvantageous position as local and foreign vessels owners/ship owners are not keen to register under the Sri Lankan flag.

Former Minister Lalith Athulathmudali introduced this registration scheme to attract vessels to register under the Sri Lanka flag to promote Sri Lankan shipping lines internationally.