MIXED REACTION FROM LOCAL SHIPPERS
Shipowners happy as foreign purchases will be cheaper but local builders wary it may hit their businesses
THE Malaysia Shipowners’ Association (MASA) says the Goods and Services Tax (GST) relief for imports of vessels and a RM3 billion allocation under the Transportation Development Fund will make purchases cheaper and enable operators to grow their fleet size.
On the converse, local shipbuilders are concerned that this would encourage shipowners to switch to foreign shipbuilders and leave local businesses in a limbo.
MASA chairman Datuk Ir Hak Md Amin said shipowners welcomed the GST relief as it would encourage shipowners to buy vessels and simultaneously improve their fleet size.
In the 2018 Budget, Prime Minister Datuk Seri Najib Razak announced that imports of bigticket items, such as aircraft and ships, by airlines and shipping companies registered in Malay-sia were given GST relief.
A sum of RM3 billion is also allocated under the Transportation Development Fund to procure vessels as well as develop aerospace technology and rail.
“The fund will be a good assistance to shipowners as it is better than commercial bank loans. “However, with this available fund, we hope the lead bank can expedite the funding to the shipping community, especially in this current (economic) downturn market and at the same time (help) maintain Malaysian ships’ fleet,” said Abdul Hak.
He requested that more details on the fund be shared with the maritime community.
“We had a Maritime Development Fund of RM3 billion announced in the 2014 Budget but it has not been utilised yet. I’m not sure if it (new allocation) will complement the previous fund or be an addition,” he said.
Abdul Hak also urged the government to look into the plight of local shipbuilders. “It will be not competitive to them as local shipowners could save six per cent if we acquire vessels abroad,”he added.
Muhibbah Marine Engineering Sdn Bhd director Ooi Kien Chuan said the ship repairing industry would be exempted from the GST, but things work differently for shipbuilding.