05 Oct 12 - 19:05
The European Commission asked Greece to clarify the workings of the tax system for its key shipping industry which is run by some of the wealthiest people in the bailed-out country.
"The commission is currently looking at the tonnage tax and has asked for details from Greece," the office of European Competition Commissioner Joaquin Almunia said.
The tax is levied on the tonnage a ship carries in place of a tax on the shippers' profits, reportedly to the great advantage of Greece's shippers and undercutting state income from one of the country's prize economic assets.
The system was set up in 1953 when the Greek shipping industry, one of the largest in the world, was rebuilding after World War II.
Greek press reports said earlier that the Commission request was driven by pressure from Germany whose shippers are losing market share.
The Commission denied that was the case, saying it was part of an investigation to ensure that competition rules on the shipping industry were being respected across Europe.
Greece has until October 30 to reply.
Greek firms control 16.2 percent of the world's "deadweight tonnage" shipping capacity, followed by Japan with 15.8 percent, with the industry accounting for around 6.0 percent of the country's economic output.
Source: AFP
