Shipping sector to be revamped

JAKARTA (JP): Minister of Finance Mar'ie Muhammad promised last week to make "structural deregulations" to the shipping sector so it could contribute more to the country's economy.

Mar'ie suggested that "structural deregulations" aimed at the most basic aspects in the shipping sector should be made in order to increase the role of the sector's services in the economy.

"I am confused as to why the shipping sector has continued to burden the economy when in fact the government has provided various tax facilities, including the exemption of value-added tax on ship imports. What more tax facilities should we give?

"Maybe what is needed is structural deregulation," he said, adding that he suspected there were other reasons that curbed the sector's development.

He acknowledged that after discussing the issue with members of the Indonesian National Shipowners Association, he had an idea of ways the sector could be improved.

Currently, shipping companies must spend more money each year because almost 95 percent of the country's imports are transported by foreign fleets.

Mar'ie predicted that national spending for foreign fleet services in the upcoming 1997/1998 fiscal year would reach US$5.6 billion.

From this amount, $5.43 billion would be spent to transport non-oil and gas commodities, while $158 million and $27 million would be for transporting oil and gas, respectively.

Mar'ie said tax exemptions have so far resulted in the importation of 139 ships during March to December last year. (pwn/rid)