Ministry approves transportation subsidy<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
The Ministry of Finance has approved a land transportation
\nsubsidy in the form of fiscal incentives on import duties and
\ntaxes.<\/p>\n
With these incentives, the government expects land
\ntransportation operators to be able to slash their operational
\ncosts by 5 percent and avoid having to raise their fares by more
\nthan 10 percent to offset the impact of the recent fuel price
\nhike.<\/p>\n
The finance ministry's director general of customs and excise,
\nEddy Abdurrachman, said on Wednesday reduced import duties would
\nbe imposed on completely built-up (CBU) buses, bus chassis and
\nspare parts for buses that local manufacturers cannot produce,
\nsuch as clutches and engine cylinders.<\/p>\n
"The import duty reductions will vary from item to item, but
\nthe import duty on several of the items will be scrapped
\nentirely," Eddy said following a meeting between officials of the
\nfinance ministry, the Ministry of Transportation and the Ministry
\nof Industry.<\/p>\n
"Chassis, for example, will have zero import duty."<\/p>\n
The import duty on CBU buses was previously 40 percent, while
\nimport tariffs for spare parts ranged between 10 percent and 15
\npercent.<\/p>\n
Eddy refused to provide more details on the fiscal incentives,
\nincluding those for taxi and train operators. He said Minister of
\nIndustry Andung A. Nitimihardja soon would address the issue in
\ngreater detail.<\/p>\n
He said he would carefully consider the impact of the reduced
\nimport duties on the revenue of the customs office.<\/p>\n
"This is of concern, especially considering that many others
\nhave asked for import duty incentives," he said.<\/p>\n
The government has targeted Rp 12 trillion (US$1.28 billion)
\nin revenue from customs, Rp 28.9 trillion from excise and Rp 271
\ntrillion from taxes this year.<\/p>\n
Meanwhile, the head of the finance ministry's fiscal policy
\ndivision, Anggito Abimanyu, said the ministry would also consider
\nproviding other forms of fiscal incentives to land transportation
\noperators.<\/p>\n
"We are considering providing tax incentives as well, but
\nreducing import duties will be the main incentive," he said,
\nadding that the fiscal incentives would likely affect the revenue
\nand expenditures in this year's state budget.<\/p>\n
The government cut the fuel subsidy and increased domestic
\nfuel prices by an average of 29 percent starting March 1. It made
\nthe move to reduce the burden placed on the state budget by the
\nmassive fuel subsidy, encourage more efficient fuel use and
\nprevent fuel smuggling.<\/p>\n
Following the fuel price hike, land transportation operators
\nraised their fares, despite a promise from Minister of
\nTransportation Hatta Radjasa that the government would provide
\nthem with fiscal incentives.<\/p>\n
The government has said it will divert more funds into public
\ntransportation in a bid to cut down extortion and other illegal
\nfees -- which account for about 40 percent of the operating costs
\nof public transportation owners. The government said it also
\nwould order local administrations to reduce the fees for
\nregistering vehicles, renting space at bus terminals and for
\nvehicle inspections.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ministry-approves-transportation-subsidy-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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