Few firms take up forestry incentives

JAKARTA (JP): Only 50 firms in forest-related industries have used the export tax and nontax incentives the government introduced last year, a government official said yesterday.

The director-general of agriculture and forest-related Industries Sujata said yesterday he expected more companies to be using the facilities by April.

Last month the government announced that exporters of processed food, pulp and paper products, processed rubber, fish and frozen shrimp, vegetable oils and toys would be eligible for export tax and nontax incentives.

This brings the number of product categories eligible for the incentives to 10. The four which were announced last year were textile and textile products, electronics, wood and rattan products, shoes and leather goods.

Sujata said his office had just finished printing the application forms.

"So far companies that seem to be very eager to get these incentives are those in the paper and rubber industries," he said.

He said many businesses were unaware of the facilities or did not understand their importance.

"This is the reason that only 50 forest-related firms have applied for the facilities," Sujata said.

In the four categories announced last year the government listed 334 eligible exporters.

He said exports of agriculture and forestry-related industries in the first nine months of last year were worth US$8.6 billion. In 1995, they reached $11.05 billion, up from $9.7 billion in 1994.

The incentives are designed to boost non-oil exports. Nonoil export growth has declined in recent years.

Under a ministerial decree issued last June, makers of selected export commodities are entitled to incentives like credited import duties or faster drawbacks or repayments of import duties paid on imported raw materials and on value-added tax paid on capital bought locally.

Customs office post-audits must be done at least a year after goods are exported and harbor authorities may process export documents without having to use a foreign exchange bank.

Special desks and services are provided for document checking.

Banking incentives for exporters include lower interest rates on rediscount facilities and longer-term use of letters of credit.

An eligible company is entitled to special export facilities for two years. This entitlement may be extended if the company meets government requirements. (pwn)