Goods for Batam tax-free

JAKARTA (JP): Goods sent to Batam Island in Riau from any other parts of the country are exempted from value added tax (VAT) and luxury sales tax, Director General of Taxes Fuad Bawazier said yesterday.

He told reporters that based on Decree No. 548/KMK.04/1994 of the Minister of Finance dated Nov. 7, all goods delivered from Indonesian customs territories to bonded areas, including Batam, are free from VAT and luxury sales tax.

Fuad acknowledged that businessmen, as well as Riau Governor Soeripto and Central Kalimantan Governor Warsito Rasman, had complained that the previous imposition of VAT and luxury sales tax on goods delivered to Batam had forced suppliers to send their products to Singapore companies, which then passed them on to the bonded island.

"The new decision on tax exemption is expected to help invigorate supplies of goods to Batam from neighboring areas within the country," he said. (riz)