Shipping firms evade taxes for survival
Shipping firms evade taxes for survival
JAKARTA (JP): Evading the payment of taxes and port billing
fees through manipulation has become common among domestic
shipping firms as their businesses continue to face increasing
competition, especially from foreign companies since
deregulation.
"There are many commercial shipping companies which manipulate
financial affairs to evade tax payments and reduce payments for
port services to keep themselves operating to get funds to repay
debts," the chairman of the Indonesian National Ship-owners
Association, Hartoto Hardikusumo, told Commission V of the House
of Representatives here yesterday.
INSA groups 653 shipping companies, including those supporting
the businesses of their holding firms, those owned by the
government and those owned by private entities which provide
passenger and freight transportation for the public.
Hartoto said that a government deregulatory measure introduced
in November 1988 allows shipping companies to serve any routes by
themselves and abolishes the flag requirement dispensation for
foreign ships traveling in Indonesia, while domestic shipping
companies which lease foreign ships are required only to report
to the Directorate General of Sea Transportation.
He acknowledged that the regulation has raised the country's
non-oil exports but also has affected domestic shipping firms.
He said that competition is getting unfair because foreign
companies, which generally offer competitive freight fees, are
allowed to enter 133 ports throughout the country to carry
commodities, thereby reducing the opportunities of domestic
shipping firms.
The situation often causes oversupply, while most of the
domestic shipping firms operate conventional vessels, he said.
"I tell the legislators what really happens," he said.
He said that shipments of the country's exports and imports
are dominated by foreign companies as the export commodities are
usually sold with FOB (free-on-board) terms, while imports are
based on a CIF (cost, insurance and freight) arrangements.
Hartoto said earlier that according to data from the
Directorate General of Sea Transportation, the market for
domestic shipping firms reached only 5.89 million cubic meters
in 1991 and 8.02 million cubic meters in 1992, while foreign
shipping companies gained 160.9 million cubic meters and 174.43
million cubic meters respectively.(icn)