Few firms take up forestry incentives

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)