Govt to expand incentives to boost non-oil exports
Govt to expand incentives to boost non-oil exports
JAKARTA (JP): The government will expand its export tax
incentives to cover more products and companies in a bid to boost
non-oil exports, Minister of Industry and Trade Tunky Ariwibowo
said yesterday.
Speaking after a meeting with President Soeharto, Tunky said
the facilities currently provided to exporters of textiles and
textile-related products, shoes, electronics, wood and rattan
products and leather goods had helped bolster their exports.
"Therefore, the government plans to extend the preferred
exporter category to products other than those (five categories
of) products, " Tunky said.
He said the government was still undecided on how many more
export products were to receive facilities under the preferred
exporter category because this had yet to be stipulated through a
ministerial decree.
"We will announce it after Lebaran (Idulfitri)," Tunky said.
The government currently gives special tax and customs
reliefs and loan facilities to exporters of those five categories
of products.
Customs and tax breaks are in the form of credited import
duties or faster drawbacks or repayments of imports duties paid
for imported raw materials and of value added tax paid for inputs
purchased from domestic suppliers.
The banking incentives for exporters in the five sectors
include a more favorable interest rate on rediscount facilities
and longer-term usance letters of credit.
Bank Indonesia (the central bank) announced last month it cut
the discount rate for special exporters to the level of Singapore
Inter-bank Offered Rates (SIBOR) flat from SIBOR plus one point.
Bank Indonesia also allows banks that issue export drafts in
U.S. dollars for importers to ask the central bank to pay them in
U.S. dollars. The central bank normally rediscounts export drafts
in rupiah.
In addition, the central bank extends its rediscount
facilities to suppliers that supply goods to exporters which
already get special status.
The rates for bank drafts issued by banks for suppliers are
based on the central bank's three-month money market securities'
cutoff rate plus or minus a set margin. The margin was set at
minus 0.50 percent last month.
Eligible
Tunky said his office had listed 334 exporters which were
eligible for the facilities, including the central bank's
rediscount facilities. Most of the listed companies are textile
exporters.
He explained companies filing for special status should not
have bad debts or problems with customs and tax offices. Besides,
they must have clear addresses and tax registration numbers.
"The government not only gives the certificates to producer
exporters, but also to trader exporters," Tunky said.
Growth of the country's non-oil exports had slowed in recent
years, while imports had increased rapidly.
Non-oil exports grew from US$27.1 billion in 1993 to $30.4
billion in 1994 and $34.9 billion in 1995. Non-oil imports rose
from $26.2 billion in 1993 to $29.6 billion in 1994 and $37.7
billion in 1995.
Non-oil exports, however, had started to recover last year.
During the first 10 months of last year, Indonesia's total
exports increased by 10.4 percent to $40.6 billion, consisting of
$9.3 billion oil and gas exports and $31.2 billion non-oil
exports.
Total imports increased by 5.1 percent to $31.9 billion,
comprising $2.4 billion oil and gas imports and $29.4 billion for
non-oil and gas imports.
Tunky said earlier exports of electronics, wood and rattan
products performed well last year. For instance, textile exports,
which fluctuated in the previous years, increased by 10.5 percent
last year to $6.85 billion from $6.2 billion in 1995. (rid)