Sept 20, 2007 (LBO) – Sri Lanka’s ship owners have warned that an unresolved dispute with Customs over a tax on vessels could force them to leave the Sri Lanka flag of registry. This could hurt the island’s prospects of building up its merchant fleet and encouraging foreign owners to register their vessels in the island, local owners said.
Such a move, affecting the growth of the industry, could lead to possible loss of jobs and substantial foreign exchange earnings.
The disputes between the Lanka Ship Owners Association and Customs on whether a ship when purchased and registered under the Sri Lanka flag should be liable to import charges remains unresolved by the government, a ship owner said.
A Lanka Ship Owners Association statement said Customs is insisting ships registered in Sri Lanka should pay a three-percent import charge known as PAL (Port and airport levy) when they enter the island’s waters.
It said ships should not be considered an import and are not liable to import charges when entering local ports.
However, Customs has refused to accept this position and are doing investigations in preparation to charge ship owners for non-payment of c