Govt removes 10 percent VAT on feed meal imports

JAKARTA (JP): The government has removed the 10 percent value- added tax (VAT) on imports of animal and poultry feed meal and its raw materials, the finance ministry announced on Thursday.

The tax exemption facility is stipulated in Ministry of Finance Decree No. 478/KMK.04/1998, dated Nov. 5.

Ministry of Finance spokesman Hadiyanto said that in order to benefit from the tax break, importers must log a request with the ministry.

"They also must submit a letter of recommendation from the Ministry of Agriculture," he said.

Hadiyanto added that imports of feed meal and its raw materials made before Nov. 5 would still be liable to the 10 percent tax.

The VAT on the imports of feed meal and its raw materials was imposed in March this year also through a finance ministry decree.

The country's poultry and cattle farmers have long urged the government to abolish the VAT on feed meal and raw materials which they consider to be burdensome amid the country's current currency crisis.

The currency crisis, which has seen the rupiah's value collapse by about 60 percent in one year, has more than doubled the price of feed meal as most of its raw materials are imported.

The crisis has also resulted in the weakening of people's purchasing power, causing a sharp drop in demand for meat.

According to the Association of Indonesian Poultry Producers, the skyrocketing prices have forced at least 80 percent of the country's 17,600 poultry farmers out of business.

Legislator Elyas, a member of House of Representatives Commission III for agriculture, forestry and plantations, transmigration and food affairs said that the removal of the tax was too late and that its imposition was not necessary in the first place.

"It has shown that the government has no vision on the prospects of the country's poultry business," he said. (gis)