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)