Association calls on government to deregulate shipping industry
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)