To remain globally competitive the industry seeks a waiver from VAT as it is done in many countries across the world.
According to a report in the Khaleej Times many major players in the UAE marine industry have been asking the Government to have a re-look at various government fees including VAT which was introduced from January this year.
Speaking on the side lines of the recently held UAE Maritime Leaders Roundtable Discussion in Dubai many top level executives emphasised the need to reduce regulatory fees and taxes.
"It is important to think about the regulations especially the VAT because many countries around the world have exempted the shipping industry from VAT and it is important. There is discussion with the government and we hope this will be taken positively. I guess we have to apply what applies anywhere else; and the principal is that the shipping industry is usually kept free from VAT," said Khamis Juma Buamim, managing director and group CEO, Gulf Navigation Holding.
"In general, there are too many fees and charges and too many time-wasting [requirements to obtain services]. Time means money and people seriously think about how much time they spend [on obtaining these services]," he added.
The maritime sector has traditionally been a major contributor to the UAE’s GDP and has greatly enhanced Dubai and Abu Dhabi’s roles as regional trading hubs. However, due to the recent turmoil in the maritime industry, margins have taken a hit and companies have been making attempts to reign in operating costs.
Head of trade and marketing for the UAE, Oman, Qatar and Iran at Maersk Line, Kapil Mehta, said that if the UAE wanted to keep its position as a premier trading hub the cost of doing business needs to be reduced. "The cost of doing business in the UAE is showing up in various shapes and forms and VAT is one of them.”
Mr Mehta further pointed out that trading has been the foundation of Dubai’s commercial success but lately focus was shifting towards other sectors like construction and energy. "It would benefit the UAE a lot in terms of diversifying away from the huge reliance on real estate and energy into a regional trading hub that it can emerge into," he said.