New action will strengthen small business development

New action will strengthen small business development

JAKARTA (JP): The new package of reform measures launched yesterday
included new steps to bolster the development of small businesses
through the allocation of more money from state-owned companies.

Minister for Cooperatives and Small Business Development Subiakto
Tjakrawerdaya said yesterday that the Rp 500 million (US$231,000) limit
that a state company was allowed to set aside from its annual net
profits for small business development had been lifted.

"This move is expected to release more funds for small business
development," Subiakto added.

He said the allowable uses of state companies' funds for small
business developments were also extended to cover more categories of
small-scale enterprises.

"The capital of the state owned PT Bahana venture capital company
will be increased to enable it to expand its role in small business
development," he said.

Subiakto added that the dividends gained by capital venture firms
from their equity participation and the capital gains on their equity
investments were both exempted from income tax. The minister explained,
this was done to create an incentive for the establishment of more
venture capital companies.

"The government will encourage the establishment of venture capital
firms in provinces and districts to bring more financial resources
closer to small firms with high growth prospects," the minister added.
(vin)