Businessmen ask for more tax incentives

Businessmen ask for more tax incentives

The Jakarta Post, Jakarta

Dozens of representatives of various business associations
asked the government on Monday to provide the business sector
with fiscal incentives to help alleviate rising costs.

The demand was voiced during a meeting with Director General
of Taxation Hadi Purnomo and members of the Indonesian Chamber of
Commerce and Industry (Kadin) and the National Economic Recovery
Committee (KPEN).

During the meeting, the businesspeople said tax cuts were
necessary to offset rising production costs caused by the
increase in electricity rates and fuel prices and the
"uncertainties" in the country.

KPEN chairman Sofjan Wanandi said tax incentives would allow
the business sector to invest in expanding their businesses,
which in turn would create more jobs.

"We are using this occasion to unveil all of the obstacles
confronting the business sector caused by the unfavorable tax
policy," he said.

Earlier this month, the government announced a package of
fiscal incentives worth about Rp 6 trillion (US$660 million),
including the elimination and reduction of luxury taxes on some
45 items, mainly electronics.

However, the businesspeople who attended the meeting were not
satisfied with the stimulus package, saying it did not cover all
business sectors.

The representatives of the Association of Soft Drink
Manufacturers (ASRIM) complained that they still had to pay
luxury taxes on their products. They said there was no reason to
impose a luxury tax on soft drinks because they were by no means
luxury products.

During the meeting, ASRIM urged the Directorate General of
Taxation to exempt soft drinks from luxury taxes.

The Indonesian Association of Feed Manufacturers asked the
government to drop plans to impose a luxury tax on feed products,
saying the plan would only lead to a surge in the price of
chickens and eggs.

The Indonesian Food and Drink Association requested the
government scrap added-value taxes on the raw materials for the
production of packaged milk.

The association said such a move would reduce the cost of
packaged milk by up to 30 percent.

Hadi said he would ask his staff to study all of the requests
and would explore the feasibility of acting on them.