Govt may grant export credit for key products
Govt may grant export credit for key products
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said
yesterday that the government is studying the possibility of
providing credit for the export of strategic industry products,
including aircraft.
Speaking at a hearing with the House of Representatives, the
minister said that the government was seeking the best means of
financing exports of strategic industry products.
"The Ministry of Finance, Bank Indonesia (the central bank)
and the Agency for the Management of Strategic Industries (BPIS)
are studying financing alternatives to support exports of
strategic industry products," the minister said during the
hearing with the House's Commission VII, which oversees banking
and trade.
The minister's remarks squarely contradicted his own previous
assertions, last month, in which he categorically ruled out the
provision of export credit to support the strategic industries.
The strategic industries are overseen by the BPIS, a government-
run agency headed by Minister for Research and Technology B.J.
Habibie.
Mar'ie had previously said the provision of such a credit
facility was virtually impossible, given the government's tight
budgetary constraints.
In yesterday's hearing Mar'ie stressed that any financial
assistance to the export activities of the strategic industries
should not be allowed to cause problems for the state coffers in
any way.
"The government should not, for example, act as the guarantor
of such export credit facilities," he said.
Habibie recently appealed to the government to provide special
credit to support the exports of the strategic industries'
products, especially the sale of aircraft produced by PT Industri
Pesawat Terbang Nusantara (IPTN).
Competition
Without such a credit facility, IPTN will face difficulties in
competing with airplane manufacturers in other countries, he
said, adding that IPTN had once lost a contract due to the
failure of the government to extend credit to the prospective
buyer.
Differences between Habibie and Mar'ie are not limited to the
issue of export credit. They also disagree over the question of
whether tax holidays -- tax exemptions during the first few years
of an enterprise's operations -- should be re-introduced.
According to Habibie, the provision of tax holidays is
essential to support the growth of new companies and to encourage
investment in remote areas, such as the eastern provinces.
In yesterday's hearing, Mar'ie once again spoke against their
re-introduction.
"There are no tax holidays in the tax law and it would
therefore be against the law for us to introduce such a
facility," said Mar'ie.
Tax holiday facilities, formerly allowed as a means of
attracting foreign investment, were abolished in 1984. The
incentives available under the current tax law are limited to
allowing companies in remote areas to carry forward losses up to
10 years and to accelerate the depreciation of assets in their
accounting.
"The incentives provided for in the present tax law are not
small. They are significant enough," Mar'ie said. (hen)