Swedish shipowners: Tonnage tax is a lifeline

Swedish shipping could be saved by the tonnage tax that the Swedish government is suddenly showing an interest in. "We're fairly optimistic," says the Swedish Shipowners' Association.
Per A. Sjöberger
Per A. Sjöberger

Just a year ago the Swedish Shipowners' Association was worried that the end was near for the once-great seafaring nation. But after Sweden's Minister of Finance two weeks ago in a u-turn for the conservative government announced that tonnage tax could become a reality for the country's shipping companies, the mood has changed completely.

"Before we could hardly see the beginning of a sunrise but now it's like the sun is about to come out for real," says Per A. Sjöberger, head of the department at the Swedish Shipowners' Association that handles the Swedish carriers' business conditions, in an interview with ShippingWatch.

Major fleet reduction

The impending introduction of a tonnage tax is more than welcome for the Swedish shipping industry which has - since the turn of the millennium - lost enormous parts of its fleet as carriers have opted to outflag in order to secure more beneficial business conditions.

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In 2002 the Swedish commercial fleet was bigger than the Danish, but because the Danish government decided to follow the EU's recommendations for state-aid to shipping - and the Swedish government did not - the Swedish fleet lost significant amounts of tonnage. So much that the Swedish fleet two weeks ago was down to 97 ships sailing under Swedish flag. Could a loss like that mean that the Swedish shipping might not be able to get back on its feet?

"This comes very, very late, but not too late," says Per A. Sjöberger.

Back on the field?

He stresses that Sweden due to its long seafaring history and tradition has all the prerequisites for becoming a great shipping nation once more. On June 1st the Swedish government changed the tax rules for foreign carriers so that they are now on par with the Swedish carriers', and this has meant that three new ships in just under two weeks has joined the Swedish flag register.

This indicates that it could be possible to return to greatness, combined with the fact that the younger Swedish generation is showing a lot of interest in the maritime training programs, and that Sweden already has a large pool of trained seafarers of some 10,000 to 15,000 people.

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"I'm much more optimistic than I was just six months ago. We'll be able to build the maritime cluster that we need and to generate jobs in the ports, for suppliers and for brokers," says Per A. Sjöberger.

The tonnage tax solution might sound like a godsend, but Per A. Sjöberger stresses that the implementation of the tax could also create new administrative burdens and a problematic transitional period, though these things do not outweigh the overall benefits of the tonnage tax scheme.

The Swedish Parliament faces an election this fall, but this should not interfere with the desire to introduce tonnage tax as a majority of the parliament is in favor of the scheme, meaning that the government is not alone on this. A date has yet to be set for a decision or vote to introduce the tonnage tax.

EU Commission approves tonnage tax scheme

Swedish carriers: We are perishing while politicians talk

Greek shipowners threatened to comply with new taxation 

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