Two ministries discuss the introduction of zero VAT rate for ship repair sector – Boris Kabakov
Shortfall in income will be leveled by the growth of turnover of ship repair enterprises
Boris Kabakov, Director of the Shipbuilding Industry and Marine Engineering Department of the Ministry of Industry and Trade, said at a seminar on shipbuilding and ship repair issues in the framework of the Arctic at the St. Petersburg International Economic Forum (SPIEF).
“We are now working very actively with the Ministry of Finance. We are confident that we will find a common ground with our colleagues and we will accept this norm (zero VAT rate - Ed.). This norm was effective until 2004, and then our ship repair sector grew at a fairly significant pace. We explain to our colleagues that the shortfall in income from the adoption of such a measure will be leveled by indirect taxes that will appear with an increase in the ship repair scope,” said Boris Kabakov.
In March, the Ministry of Industry and Trade appealed to Prime Minister Mikhail Mishustin requesting to support merchant ship repair sector in the face of the sanctions by setting a 0% VAT rate for repair of civil ships, the department told PortNews. Appropriate changes can be made to the Tax Code of the Russian Federation.
Zero VAT proposals have been under discussion since 2019. Market participants interviewed by IAA PortNews are of one mind that right now the abolition of VAT on repair work for the domestic fleet at Russian shipyards will become a significant measure of state support for several industries at once: merchant and passenger shipping, industrial fishing, shipbuilding and ship repair, as well as for significant the number of related production areas - metallurgy, engine manufacturing, paint and varnish coatings, electronics.
We will discuss the problems of ship repair and components at the Ship Repair, Modernization, Components Conference that will be held prior to the International Fishery Forum and Exhibition of the Fishing Industry, Seafood and Technologies (SEAFOOD EXPO RUSSIA) on September 20, 2022 in St. Petersburg. The event organizer is PortNews Media Group with the support of United Shipbuilding Corporation (USC).
