Shippers seek tax breaks

LIMASSOL (Reuters) – The Cyprus shipping industry, one of the EU’s largest, wants tax breaks to counter the impact of a Turkish ban on their fleet. Turkey’s EU accession negotiations were partially suspended in December 2006 because of its refusal to open its ports and airports to Cyprus, an EU member since 2004. Shipping companies say they want more incentives by Nicosia for Cyprus to hold its competitive edge in shipping. «We have asked the government to offer new tax incentives to Cyprus shipping companies, as a ‘counter balance’ measure to the Turkish ban,» said Andreas Droussiotis, the outgoing chairman of the Cyprus Shipping Council (CSC). Cyprus has the third-largest shipping fleet in the European Union after Greece and Malta, and the largest ship management center in Europe where vessels are chartered. The overall impact from the ban is difficult to quantify, but Cyprus ports operator CPA says lost revenue from ships bypassing Cyprus exceeds 100 million Cyprus pounds (-171 million) each year. Foreign ships which dock in Cyprus or carry Cypriot cargoes risk being barred from Turkish ports. Turkey has barred Cyprus-flagged ships from its ports since 1987, not recognizing the island’s Greek-Cypriot government, which has represented Cyprus in the European Union since its admission to the bloc in 2004. «The ban is illegal and it has a significant economic impact on us and others. Taking into account the interest that Turkey has expressed in joining (the EU), finally it will have no choice but to comply with international law,» Transport Minister Haris Thrassou told Reuters. The CSC, an industry group representing shipowners and ship management companies, did not give details on what tax breaks it sought. «It would attract new shipping related activities and offer financial justification for shipping companies… to remain loyal to Cyprus despite the adverse effects of the ban,» Droussiotis said.

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