KUALA LUMPUR: The Malaysia Shipowners’ Association (MASA) applauds the Goods and Services Tax (GST) relief for the importation of vessels, as well as, the RM3 billion allocation under the Transportation Development Fund as these will make vessel purchase cheaper and enable operators to grow their fleet size.
However, local shipbuilders are sceptical over the announcement as this will encourage shipowners to switch to foreign shipbuilders, leaving the local ones in a limbo.
MASA chairman Datuk Ir Hak Md Amin said shipowners welcomed the GST relief as it would encourage shipowners to acquire vessels and simultaneously improve their fleet size.
Under the 2018 Budget, Prime Minister Datuk Seri Najib Razak announced that imports of big ticket items such as aircraft and ships by airline and shipping companies registered in Malaysia, 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,” Abdul Hak said.
He requested for 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. So, for this one, I’m not sure if it will complement the previous fund or if it an addition,” he told Bernama in response to the Budget announcement on Friday.
In the meantime, 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 (MMESB) director Ooi Kien Chuan said the ship repairing industry would be exempted from the GST but things work differently for shipbuilding.
“The market is already quiet now and we hope the government will look deeply into the matter as it is expected to reduce activities at the local shipyards,” he added.
He pointed out that the shipbuilding industry was a labour intensive industry and the lack of activities in the shipyard could jeopardise employment. — Bernama