Govt vows gradual cut in export tax on logs<\/p>\n
JAKARTA (JP): The government will gradually cut taxes on logs
\nto reach 10 percent in two years to guarantee a sufficient supply
\nfor domestic demand, the forestry and plantations minister said
\nThursday.<\/p>\n
Sumahadi said the decision would not contravene the
\ngovernment's reform commitment made to the International Monetary
\nFund (IMF) in January.<\/p>\n
\"It is the best way to avoid timber companies from
\noverexploiting our forests for export without providing a supply
\nfor domestic industries,\" he said.<\/p>\n
The 50-point agreement with the IMF stipulates that \"in March
\n1998, export taxes on logs, sawn timber, rattan and mineral will
\nbe reduced to a maximum of 10 percent ad valorem, and appropriate
\nresource rent taxes are imposed\".<\/p>\n
Sumahadi said the government currently imposed 30 percent
\nexport tax on logs.<\/p>\n
By the end of December this year, he said, the tax would be
\nreduced again to 20 percent. By the end of December 1999, the
\nexport tax would be cut further to 15 percent.<\/p>\n
The government would further reduce the tax to 10 percent by
\nthe end of 2000, he said.<\/p>\n
Sumahadi also said that the export taxes would eventually be
\nreplaced by resource rent taxes, as required by the IMF, to
\nprotect the environment while eliminating the bias against
\nproduction for export rather than for domestic use.<\/p>\n
He added that he was still waiting for a directive from
\nPresident Soeharto on regulating resource rent taxes.<\/p>\n
The government previously imposed an export tax of 200 percent
\non logs. The high tax was aimed at encouraging timber companies
\nto fulfill local demand and force buyers to purchase Indonesian
\nprocessed, higher-value wood products. (gis)<\/p>",
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"sponsor": "Okusi Associates",
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