Govt plans new tax incentives

Govt plans new tax incentives

JAKARTA (JP): The government will issue a new package of
deregulation measures in the next few days to boost non-oil and
gas exports, Minister of Industry and Trade Tunky Ariwibowo said
yesterday.

Tunky said the deregulation measures would include value-added
tax incentives for export companies.

"With the currency crisis, our officials have realized the
importance of exporters in raising foreign exchange... They must
therefore be helped and not be left working alone," Tunky said
after meeting with President Soeharto at Merdeka Palace.

Tunky said one of the major problems for Indonesian exports
came from the government itself, which thought more about the
ministry's interests rather than national interests.

"We have identified all export obstacles... but related state
agencies or ministries are often divided on how to solve the
problem," Tunky noted.

Exporters have complained about the slow refund of value-added
tax (VAT) for export firms despite the fact that the Directorate
General of Tax has promised that refunds would be made available
10 days after exporters file tax refund forms.

Exporters are exempted from duties and VAT on materials
imported for the production of export goods. They are obliged to
pay the duties and VAT in advance and have the right to a refund
from the tax office and the customs and excise office.

Bisnis Indonesia daily quoted government officials as saying
on Monday that exporters would be exempted from the tax.

"There are indications that the minister of finance and his
officials will agree to this incentive," Tunky said without
further elaboration of the deregulation measure.

In a related development, the Indonesian Association of
Exporters said its members preferred to wait for monetary
stability before making any major moves in their businesses.

"Only monetary stability would ensure us of our ability to
boost exports," Antara quoted the association's chairman Ibrahim
Gani as saying on Monday. (prb)