Tax measures for shipping announced in this week's Budget have had an immediate impact. An Arklow Shipping vessel launched in the Netherlands yesterday will join the Irish register, along with a sister ship due for completion next year.

Arklow Shipping had already begun to register vessels abroad but this policy is expected to be reversed. Under the new scheme, shipping firms can opt for taxation based on the size/tonnage of their vessels, rather than on their profits or losses.

The European Commission has been encouraging member-states to introduce a more benign regime to boost the sector, and several states have already done so, including Britain and Germany.

The Irish Maritime Development Office, set up two years ago, has been lobbying for a change here and the chairman of its advisory group, Mr Padraic White, has welcomed the Minister's move as a "huge psychological boost".

In the past 10 years there has been a 50 per cent drop in vessels registered here and this was reflected in a drop in Irish seafarers serving on Irish vessels.

Arklow Shipping, which has 22 vessels under the Irish flag, had registered 13 ships on the Dutch register. Irish Ferries also had warned that it might have to look elsewhere if the tonnage tax scheme was not introduced.

"It is clear that the tide is turning for the Irish shipping sector," said Mr Glenn Murphy, director of the marine development office.

"Tonnage tax is the catalyst that will facilitate economic growth in the sector, and provide jobs ashore and at sea."

The MV Arklow Rose, launched yesterday, is a 4,500 tonne dry bulk cargo vessel. Mr Pat Corcoran, financial director of Arklow Shipping, said his company was encouraged by the positive action taken by the Government, and could now see potential for growth in the shipping and related service industries here.