Govt slashes tariffs, taxes and levies
JAKARTA (JP): The government has cut import tariffs on 1,600 items, slashed the number of local taxes and fees, banned new loans for land acquisition and development, and allowed imports of used cargo and fishing vessels.
These measures were stipulated in a new package of economic reforms which was announced, after several delays, by Coordinating Minister for Economy and Finance Saleh Afiff yesterday.
"The measures are a continuation of preceding deregulation policies aimed at improving efficiency and simultaneously to confirm our commitment to multilateral trade agreements," Afiff told a press conference.
Afiff was accompanied at the conference by Coordinating Minister for Production and Distribution Hartarto, Minister of Finance Mar'ie Muhammad, Ministry of Industry and Trade Tunky Ariwibowo and Bank Indonesia Governor J. Soedradjad Djiwandono.
The package cuts tariff rates on 1,461 industrial products, 136 agricultural commodities and three health products.
"After this latest deregulation package, 62.55 percent of the total tariff codes will be in the range of 0 to 10 percent," said Afiff.
Afiff said the number of items with zero tariff rose to 1,419 from 1,399, while the number of items with a 5 percent tariff rose to 2,275 from 2,066, those with 10 percent tariff increased to 1,556 from 610.
"This reform decreased Indonesian average, unweighted import tariffs from 13 percent to 11.9 percent, the second lowest in Southeast Asian countries after Singapore," he said.
Details
No further details on the tariff reductions were immediately available as the ministers announced only a summary of the ministerial decrees, rules and directives which enforce the measures.
A complete set of the measures in technical detail is to be distributed today.
The government last year introduced two reform packages in January and June, respectively.
The measures also free imports of used fishing and cargo vessels in a bid to further develop efficient inter-island freighter services and bolster the fisheries industry.
In an another concerted drive to reduce the costs of doing business here, that business people have complained about, the number of local taxes was cut from 42 to nine and local fees or levies from 192 categories to 30 categories.
"Regional taxes and retributions will be levied only with the approval of the Minister of Home Affairs after consultations with the Minister of Finance," said Afiff.
In an effort to control increased lending to the property sector, Bank Indonesia issued a decree yesterday which bans new loans for land acquisition and development by property companies, except for the development of cheap housing.
The package also allows sugar mill owners to import raw sugar. Previously only the National Logistics Agency was allowed to import raw sugar.
Small exporters will get another significant boon from reduced red tape as the package increases the value of exports without an export declaration form from Rp 100 million (US$41,666) to Rp 300 million.
The system of export tax on palm oil was simplified and export tax rates were cut to a range of 2 percent to 5 percent from a 10 percent to 12 percent range to encourage exports of refined palm oil.
The package eliminates the fee and cash guarantee imposed on applications for business licenses and allows the export of scrap stainless steel, brass and copper.
It also allows foreign investors to set up auction companies in joint ventures with domestic firms.
The duty exemption previously granted on raw material and capital goods imports only to domestic and foreign investment companies licensed by the Investment Coordinating Board is now extended to investment ventures administered by other agencies such as the industry and trade ministry and local administrations. (jsk/vin)
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