GMS: Bangladeshi ship recycling tax likely to be postponed

GMS, a cash buyer of ships for recycling, said that the attempt to reverse the recently imposed 15% value-added tax (VAT) on ships being sent to Indian ship-recycling markets will likely be successful.

Specifically, the announcement comes, after the Bangladesh Shipbreakers Association (BSBA) expressed concerns to the highest authorities in government, in an attempt to reverse VAT on incoming ships. In view of this, the finance ministry informed that VAT will now be postponed for at least another two years, which should see prices remain at par with those seen in the first quarter of the year.

In early June, ship-recycling sectors in Pakistan and Bangladesh witnessed a decrease in LDT price, after the respective countries released their 2017 budget announcements.

The Pakistani budget first brought falls of about USD 10/LDT, “as rumors of an even worse fate for the Bangladeshi market surfaced and were eventually confirmed” by the announcement of their budget.

The Pakistan Shipbreakers Association (PSBA) is due to meet in the coming week, in order to also address some of the concerns arising from their recent budgetary changes affecting their industry, according to GMS.