The Industry Ministry has proposed waiving import duties worth more up to Rp 1
he Industry Ministry has proposed waiving import duties worth more up to Rp 1.68 trillion (about US$167.5 million) to the Finance Ministry so that 13 industries can improve business performance to help boost the economy.
Based on the Industry Ministry’s data obtained by The Jakarta Post, the proposed amount for the total 2010 waiver is 26.4 percent higher than the Rp 1.336 trillion already allocated in the 2009 state budget.
Among the 13 industries proposed, seven are already enjoying these fiscal incentives worth an estimated Rp 335.85 billion this year under the same scheme.
The seven are the automotive industry, electronics, shipping industry, the machine tools industry, sorbitol production, telecommunications, the informatics industry and ballpoint pen production.
The methylin mercaptide industry, which receives the fiscal incentive this year, is taken off the proposed 2010 list as “there’re relatively no companies [eligible] to be proposed”, the Ministry’s head of research and development center, Dedi Mulyadi, said Wednesday.
“We’re also in a discussion to no longer include the sorbitol industry in the proposed 2010 list because there’s only one company producing sorbitol in Indonesia. In fact, that company is the only one producing sorbitol in Southeast Asia.”
“But we [were] eventually asked to keep this manufacturer on the list.”
The sorbitol producer Dedi referred to was publicly listed PT Sorini Agro Asia, which is situated in Surabaya, East Java.
Meanwhile, five new industries are included in the proposed 2010 list eligible for waived import duties.
The new categories include polyethylene and polypropylene which are yet to be manufactured locally to be used for plastic packaging; polyethylene and polypropylene already produced locally but yet to meet locally required specifications; raw materials for the nut and bolt industry; raw materials for the steel cord industry; and raw material for the plastic carpet industry.
Industry Minister Fahmi Idris has said such fiscal incentives are needed to keep manufacturing sectors afloat, and are expected to help create jobs directly, or indirectly.
“There will be a verification process on every applying manufacturer for their waived import duty proposals,” he said.
Despite a higher budget proposed for waived import duties, the Ministry has been underspending this year, with only Rp 320.68 billion in waived import duties already disbursed and another Rp 15.98 billion in estimated waived import duties still to complete the verification process, as of Aug. 24.
So far this year there are 66 companies, out of 87 applicants, that have completed procedures and received the right to these fiscal concessions, as of Aug. 24.
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