Simplified export procedures head reform package
Simplified export procedures head reform package
JAKARTA (JP): The deregulatory package announced by the government yesterday includes the simplification of export and investment procedures in addition to the reduction of import tariffs on nearly 1,500 items.
The simplification of export procedures includes the increase in the maximum value of export goods which are not required to obtain export declaration documents (PEB) from Rp 10 million (US$2,450) to Rp 100 million
Raising the maximum value for the shipment of goods without PEB documents is expected to encourage non-oil exports by cooperatives as well as by small and medium-sized companies.
The simplification also includes the elimination of pre- shipment inspections on export goods.
The new deregulatory package also includes the simplification of requirements and procedures to obtain the certificates of origin (SKA) of Indonesian export goods. This facility includes the reduction of the number of regulations on SKA from 31 to only four and the reduction of the number of supporting documents to complement the SKA from four -- Letter of Credit (L/C), PEB, Invoice/Packing List, and Bill of Lading (B/L) or AW Bill -- to only two, the PEB and B/L or AW Bill.
The government is also giving incentives in the form of accelerated customs services and tax breaks as well as the provision of banking facilities for export-oriented companies, which meet such requirements as owning permanent addresses and tax registration numbers in Indonesia, being good and obedient taxpayers, never breaking customs laws and regulations and having no debt problems.
The facility in the banking field as determined by Bank Indonesia includes the expansion of banking services to Africa, Eastern Europe and Latin America, in addition to the use of a rediscount facility in accordance with the market rate and the use of usance L/Cs for a maximum of two years.
The local L/C will also be rediscountable for a maximum of three months beginning on Dec. 1, this year.
For a trial period, the facility will be given first to textile and textile-related products, footwear, electronics, finished wood and rattan products and leather goods.
Measures taken to improve the business climate include, among other things, the simplification of regulations for companies operating in industrial zones, the operation of bonded zones and bonded warehouses by private companies, the dispensation of import activities for foreign-investment manufacturing companies and the simplification of procedures for the importation of waste to be used as industrial raw materials.
Industrial companies located in industrial zones, for example, are no longer obliged to possess permits related to the location and construction of factories or those related to pollution and other environmental matters as long as they have obtained investment approvals from the Investment Coordinating Board.
In relation to the operation of bonded zones, the new deregulatory package allows the use of bonded zones for warehousing, processing, exhibiting and limited sales with special treatment for customs, excise and taxation.
Opportunity
The deregulatory measure, in addition, gives private firms an opportunity to operate bonded zones, which used to have to be operated by state-owned companies.
Other than for processing areas, bonded zones, therefore, can now function as warehousing facilities and their operations are open to the private sector.
Basically, a bonded zone can be a bonded warehouse, an entreport for exhibition or a duty free shop.
In order to push non-oil exports and to expand employment opportunities, the government will also allow manufacturing companies, with foreign investment (PMA) status, to import complementary goods from their offshore affiliates. Such a practice was previously prohibited.
In addition, companies in bonded zones are also allowed to sell their own products on the domestic market up to the wholesaler-level, a facility which was previously given only to joint venture trading companies.
Manufacturing companies with a PMA status are also allowed to sell imported complementary goods domestically.
According to the newly issued measures, the sale of imported complementary goods by PMA-status companies on the domestic market should, however, be made in the same package as the sale of their own products. Furthermore, the value of such companies' own-product exports should be higher than the value of the imported complimentary goods.
The procedure for the importation of waste for industrial raw materials will be also simplified, in addition to an adjustment of the tariff codes of imported waste.
Yesterday's deregulatory package also provides the schedules for tariff reductions stipulated in the deregulatory measures introduced in May 1995.
The tariffs on the group of commodities targeted to have the a maximum tariff of 5 percent in year 2000 will be reduced by 5 percent in 1997 and 1999, except for those goods whose tariffs are already 5 percent.
The tariffs on the group of commodities targeted to achieve a maximum of 10 percent in year 2000 will also be lowered by five percent in 1996, 1998, 2000 and 2002, except for those already at 10 percent.
The following items are excluded from the tariff schedule reduction: certain agricultural commodities, certain automotive products, certain chemical products, and plastic and metal products.
Tariffs on distilled alcohol products and alcoholic beverages will not be lowered.
In the May 1995 deregulatory package, import tariffs and surcharges were divided into two categories. Now the surcharges are eliminated because their definition in the newly issued Customs Law does not exist.
According to Minister of Finance Mar'ie Muhammad, the new tariff reduction schedule covers 1,497 tariff codes out of the existing 7,288 tariffs.
In addition, the newly issued deregulatory package also simplifies import licenses, which among other things covers the change in the import regulations on certain products in order to smooth the procurement of capital goods and raw materials as well as to increase the efficiency of the domestic industry.
The deregulatory package also sets guidelines on the introduction of an anti-dumping measure to overcome possible dumping practices from other countries and in order to protect domestic industry.
An anti-dumping committee will be assigned to conduct research to find out any dumping practices by exporters in other countries or subsidized by their governments and to recommend an action plan against such practices.
The committee is to be chaired by Minister of Industry and Trade Tunky Ariwibowo, assisted by Mar'ie.
Tunky said that he will soon announce the other members of the anti-dumping committee and issue its technical programs. (hen)