Association calls on government to deregulate shipping industry
JAKARTA (JP): The country's shipowners urged the government on Tuesday to cut taxes and ease bureaucratic procedures in the shipping industry to help it convalesce from its financial turmoil.
Firdaus Wadjdi, the chairman of the Indonesian National Shipowners Association (INSA), said local shipping companies were also hurt by the government's lack of support.
"We appeal to the government to pay attention to the shipping industry and to create good policies to build a conducive business climate. Otherwise, more local shipping firms will just move their business base overseas," he said.
He said several local companies had moved their bases elsewhere, such as Samudera Shipping Ltd., which moved its base to Singapore in 1993 due to bureaucratic obstacles and undesirable tax policies in the country.
"Several other companies are likely to follow suit. Djakarta Lloyd has planned a move to Singapore, too, because the country provides a more conducive climate for the shipping business," he said on the sidelines of the 25th annual general meeting of the Federation of ASEAN Shipowners Associations (FASA).
The meeting was attended by delegates from the Filipino Shipowners Association, Malaysian Shipowners Association, Singapore Shipping Association, Thai Shipowners Association and Vietnam Shipowners Association.
Firdaus said tax and bureaucracy problems along with the lack of financial capability and skilled crews have made local shipping companies unable to compete with foreign shipping lines in transporting cargo to and from Indonesia.
He said the downturn in the country's shipping industry was reflected in the fact that the market share in international trade had plunged to a mere 3.8 percent from between 46 and 47 percent in the 1980s.
He added the country ranked fourth in Southeast Asian countries in terms of numbers in its fleet, compared to its first position in the 1980s.
Criticism against the government's lack of support in the local shipping industry was also voiced by Soedarpo Sastrosatomo, chairman of Samudera Shipping Ltd., a subsidiary of Samudera Indonesia Group.
"The (Indonesian) government is never serious with helping the local shipping industry. It is only lip service when they say they want to develop the country's maritime strength," he said.
"The difference between doing business in Singapore and in Indonesia is like night and day. Doing business in Indonesia is so costly and full of bureaucratic barriers," he added.
In a bid to help the country's ailing shipping industry, the government lifted the 10 percent value-added tax (VAT) on the purchase and lease of ships, docking and port services early this year.
The shipowners, however, said the VAT lift was not enough as there were still some excessive charges, including the 1.2 percent corporate tax and the mountainous levies imposed by the port authority and other related agencies.
Minister of Communications Agum Gumelar, who officially opened the FASA meeting, acknowledged governmental regulations had failed to develop the country's shipping industry and made local shipping unable to compete with foreign shippers.
He said national shipping companies transported only 3.85 percent of the country's exports and imports totaling about 226.9 million metric tons, leaving the remaining bulk for foreign shipping companies. (cst)