Prijadi asked to impose tax on raw leather exports

Prijadi asked to impose tax on raw leather exports

JAKARTA (JP): Minister of Industry and Trade Luhut Panjaitan
has proposed that Minister of Finance Prijadi Praptosuhardjo
reimpose an export tax on raw leather in a bid to protect the
country's ailing tanning industry.

In his letter, Luhut said the export tax on raw leather should
be set at between 20 percent and 30 percent to ensure that the
local tanning companies would receive adequate supplies of the
raw material.

"Without the protection, it will be difficult to develop the
tanning industry," the minister said in his recommendation
letter.

The local tanning companies encountered difficulties after the
Ministry of Finance removed the export tax on the raw leather in
April 2000 to meet the economic reform agenda set by the
International Monetary Fund (IMF) in return for its bailout
funds.

Diyono Hening Sasmito, chairman of the association of the
Indonesian leather tanning industry, said on Monday that the
domestic supply of the raw leather worsened after several
exporting countries such as India, Pakistan and Brazil limited
their exports.

According to him, nearly half of the leather tanning companies
in the country had closed their operations following the removal
of the export tax.

Diyono added that, before the export tax was removed, the
number of tanning companies exceeded 600, with a total production
of 49,000 tons.

"At present, the number of the tanning companies are only 366,
with a total production of 17,850 tons," he told The Jakarta
Post.

Diyono said he had brought the complaint to members of the
House of Representatives (DPR) and hoped the legislators would
help solve their problem. (05)