Govt unveils new reform package<\/p>\n
JAKARTA (JP): The government introduced a package of
\nderegulation measures yesterday to improve the country's export
\nperformance and encourage the establishment of more export-
\noriented enterprises.<\/p>\n
Minister of Industry and Trade Tunky Ariwibowo and Minister of
\nFinance Mar'ie Muhammad jointly announced the reduction of import
\ntariffs on 428 items, the allowing of wholly foreign-owned
\ncompanies to set up exporting and importing firms, and the
\nexemption of imported vessels from paying value added tax.<\/p>\n
Tunky pointed out that the new package, the announcement of
\nwhich was delayed twice, represents only the first phase of a
\ncomprehensive deregulation package to be launched this year.<\/p>\n
Exports<\/p>\n
Yesterday's measures cover only the manufacturing industry,
\ntrade and finance. They are aimed at encouraging the development
\nof export-oriented industries, eliminating export and import
\nbarriers, opening export and import businesses to foreign firms
\nand facilitating the importation of capital goods and raw
\nmaterials.<\/p>\n
To further develop export-oriented industries, the government
\nwill allow the inflow and outflow of goods between bonded zones,
\nexport processing entreports and Indonesian customs zones. Bonded
\nzones are industrial sites where goods awaiting re-export can be
\nstored without having duties charged on them.<\/p>\n
Companies are to be granted rebates (drawbacks) for the duties
\npaid on imported materials and components used not only for the
\nproduction of goods for direct export but also for those sold to
\nbonded zones and export processing entreports for further
\nprocessing for export.<\/p>\n
The government also withdrew a monitoring fee imposed on
\nexporters of textiles and textile-related products to countries
\nwhich set import quotas. Such a measure is meant to help reduce
\nthe costs of exports.<\/p>\n
"The government has eliminated this monitoring fee because it
\nis its duty to provide such a service and therefore it should be
\nborne by the government," Tunky contended.<\/p>\n
The government, through the state-owned surveyor firm PT
\nSucofindo, previously imposed a monitoring fee of Rp 3.03
\n(US$0.0013) per meter of textiles exported to quota-imposing
\ncountries.<\/p>\n
Tunky added that the government would continue to withdraw
\nlevies imposed on textile producers and exporters, including
\nthose related to licensing and fees collected by local
\nadministrations.<\/p>\n
The Indonesian Textile Association has listed 35 different
\nlevies, ranging from Rp 10,000 (US$4.35) to Rp 800,000, imposed
\non textile and textile-related companies.<\/p>\n
To help boost exports, the package also eliminated export
\ntaxes on a number of products, including finished leather, scraps
\nof aluminum alloy and Cendana wood. Export taxes on crude palm
\noil remain untouched.<\/p>\n
The measures also allow foreign investors to set up wholly
\nforeign-owned exporting and importing firms.<\/p>\n
"However, wholly foreign-owned importing companies are
\npermitted to import only goods for further processing by
\nindustrial firms in bonded zones and export processing entreports
\nfor reexport," Tunky added.<\/p>\n
He said that as of April, private companies will be allowed to
\ndevelop and manage bonded zones, which are formerly the
\nprerogative of state-owned companies. "We and the Ministry of
\nFinance are working on the technical details on this," said
\nTunky.<\/p>\n
Tariffs<\/p>\n
When explaining the aspects of the deregulation under his
\njurisdiction, Mar'ie noted that the package cut import tariffs by
\namounts ranging from 5 percent to 20 percent, covering 428 items
\nor almost 6 percent of the 7,284 items now subject to tariffs.<\/p>\n
He explained that most of the lowered tariffs apply to capital
\ngoods and raw materials used directly or indirectly by export-
\noriented industrial firms.<\/p>\n
They include trucks, trailers, tractors and a number of
\nmachines as well as raw materials for furniture, leather-based,
\nagro-based and textile-related industries as well as a number of
\nlight industries.<\/p>\n
Imports of machinery and plant equipment by automobile
\ncompanies are exempted from duties, Mar'ie added.<\/p>\n
"Previously, this facility was granted only to industries
\noutside the automotive sector," Mar'ie said.<\/p>\n
The new package, however, does not withdraw import controls on
\n119 items, including steel, lube oils, toxic wastes, wheat,
\nsoybean, vegetables, milk, rice, sugar, garlic and cloves.<\/p>\n
The new package removes the value added tax on the importation
\nof all vessels except yachts and cruise ships.<\/p>\n
To further empower local shipping companies, the government
\nalso lifted the value added tax on shipping-related services,
\nincluding leasing, docking and other port-related services.<\/p>\n
"We hope these measures will increase the capacity of national
\nshipping companies in inter-island and international freight
\nservices," Mar'ie said.<\/p>\n
The Indonesian National Shipowners Association (INSA) welcomed
\nwith reservations the eased tax treatment on vessel imports and
\nshipping services. "These measures should be supplemented by the
\nreduction of licensing red tape at the sea transport directorate
\ngeneral," INSA's secretary-general, Barens T. Saragih, commented
\nyesterday.<\/p>\n
He cited the permits which shipping companies have to obtain
\nfor selling or buying ships as an example of unnecessary
\nbureaucracy.<\/p>\n
"It sometimes takes more than one year to obtain a permit to
\nsell or buy a ship," Saragih complained, questioning why shipping
\nfirms have to get government approvals for such a transaction.<\/p>\n
"I cannot understand why the government should intervene in
\nthe selling and buying of ships," he said.<\/p>\n
Saragih added that the processing of government permits for
\nship loading and unloading also often takes several days to
\ncomplete. (team)<\/p>\n
Editorial -- Page 4<\/p>\n
Export -- Page 11<\/p>\n
Comments -- Page 12<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-unveils-new-reform-package-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }