Govt may grant export credit for key products<\/p>\n
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
\nyesterday that the government is studying the possibility of
\nproviding credit for the export of strategic industry products,
\nincluding aircraft.<\/p>\n
Speaking at a hearing with the House of Representatives, the
\nminister said that the government was seeking the best means of
\nfinancing exports of strategic industry products.<\/p>\n
\"The Ministry of Finance, Bank Indonesia (the central bank)
\nand the Agency for the Management of Strategic Industries (BPIS)
\nare studying financing alternatives to support exports of
\nstrategic industry products,\" the minister said during the
\nhearing with the House's Commission VII, which oversees banking
\nand trade.<\/p>\n
The minister's remarks squarely contradicted his own previous
\nassertions, last month, in which he categorically ruled out the
\nprovision of export credit to support the strategic industries.
\nThe strategic industries are overseen by the BPIS, a government-
\nrun agency headed by Minister for Research and Technology B.J.
\nHabibie.<\/p>\n
Mar'ie had previously said the provision of such a credit
\nfacility was virtually impossible, given the government's tight
\nbudgetary constraints.<\/p>\n
In yesterday's hearing Mar'ie stressed that any financial
\nassistance to the export activities of the strategic industries
\nshould not be allowed to cause problems for the state coffers in
\nany way.<\/p>\n
\"The government should not, for example, act as the guarantor
\nof such export credit facilities,\" he said.<\/p>\n
Habibie recently appealed to the government to provide special
\ncredit to support the exports of the strategic industries'
\nproducts, especially the sale of aircraft produced by PT Industri
\nPesawat Terbang Nusantara (IPTN).<\/p>\n
Competition<\/p>\n
Without such a credit facility, IPTN will face difficulties in
\ncompeting with airplane manufacturers in other countries, he
\nsaid, adding that IPTN had once lost a contract due to the
\nfailure of the government to extend credit to the prospective
\nbuyer.<\/p>\n
Differences between Habibie and Mar'ie are not limited to the
\nissue of export credit. They also disagree over the question of
\nwhether tax holidays -- tax exemptions during the first few years
\nof an enterprise's operations -- should be re-introduced.<\/p>\n
According to Habibie, the provision of tax holidays is
\nessential to support the growth of new companies and to encourage
\ninvestment in remote areas, such as the eastern provinces.<\/p>\n
In yesterday's hearing, Mar'ie once again spoke against their
\nre-introduction.<\/p>\n
\"There are no tax holidays in the tax law and it would
\ntherefore be against the law for us to introduce such a
\nfacility,\" said Mar'ie.<\/p>\n
Tax holiday facilities, formerly allowed as a means of
\nattracting foreign investment, were abolished in 1984. The
\nincentives available under the current tax law are limited to
\nallowing companies in remote areas to carry forward losses up to
\n10 years and to accelerate the depreciation of assets in their
\naccounting.<\/p>\n
\"The incentives provided for in the present tax law are not
\nsmall. They are significant enough,\" Mar'ie said. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-may-grant-export-credit-for-key-products-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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