Shipping sector to be revamped

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)