Registering a ship in SA will soon be more attractive

Tonnage tax progress a boon, but other issues must also be addressed ALAN PEAT IT IS hoped that the legislation for tonnage tax – a criterion in promoting ship registration in SA – will be finalised this year. That’s the thinking anyway at the department of finance. It has this seafaring issue high on its agenda, and is helping to drive a committee – with members from government departments and private sector associations – along a path to making the SA ships’ register more attractive to shipowners globally. Sitting on the various deciding bodies are representatives of the departments of finance, justice, transport, labour and home affairs (immigration); and industry bodies like SA Maritime Safety Authority (Samsa), the Master Mariners Association (MMA), the Maritime Law Association (MLA), the Association of Shipping Lines (ASL) and the Association of Ships Agents and Brokers of SA (Asabosa). But, say inside sources, while the tonnage tax might appear this year, there are other issues which also need to be solved at committee level – and not all the involved government departments have them as high on their priority lists as finance. The tonnage tax in itself, however, is a valuable boost. It would see shipping companies being taxed on the size of their ships and not income – effectively lowering the rate of tax they would have to pay. Committee members who talked to FTW are expecting a draft of the legislation for comment quite soon, and it was suggested that the department of finance intended to get it implemented before year-end. But one of the other main stumbling blocks is mortgage ranking in SA – where legal sources told FTW that institutions that finance ships are not too keen on the lowly ranking they would take in the list of creditors if an SA-flagged ship was ever attached and sold to cover debt. However, said an FTW contact, the department of justice is moving quite quickly, and has already proposed amendments to the Admiralty Act which would place the ship financiers at a higher level in the list of preferred creditors. Also on the agenda are exchange controls and work permits for foreign crews. But the overall pace of the whole exercise is not as fast as some would like to see.