Shipping firms need fund for new vessels

JAKARTA (JP): The Indonesian National Shipowners Association suggested yesterday that the government introduce measures to help improve the capability of its members to purchase new vessels.

Association chairman Firdaus Wadjadi and secretary-general Barens Th. Saragih told a hearing with the Budgetary Commission of the House of Representatives yesterday that domestic shipping firms desperately wanted three concessions to support their businesses.

"We want the government to create reasonable pricing of vessels and an easy way to own vessels," Saragih said. "We also want an easier and cheaper system for the operation of ships."

He said the government, for example, could extend Rp 2 billion in financial assistance per year to domestic ship operators.

"It's up to the government whether the loans are derived from banks or other institutions, but the most important thing is that their interest rates must be competitive," he said.

He acknowledged that the government had introduced measures to help improve the efficiency of shipping firms, most of which are freight service companies.

Under rulings introduced earlier this year, for instance, licensing procedures for ship operations have been simplified and value-added tax on imports of fishing, freight and passenger vessels have been eliminated.

Earlier this week the Ministry of Finance also reduced the income tax rate for domestic shipping companies from 1.8 percent to 1.2 percent of gross revenues.

However, Firdaus and Saragih said yesterday that shipping companies are still required to pay various levies.

He explained that domestic shipping companies are still required to pay several taxes, such as a 7.5 percent tax for the procurement of particular ships from foreign countries.

Saragih said that the association, set up in 1976, currently groups about 700 private and state-owned oceanliners. (icn)