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)