The government has allocated up to Rp 1.53 trillion (US$166.8 million) on import duty exemption for 14 industries as part of a stimulus package to achieve economic growth of more than 5.5 percent, the Finance Ministry said.
This means the government will pay the import duty on goods purchased by these industries to help improve their competitiveness and economic performance.
The Directorate General of Agro and Chemical Industries will receive Rp 151.79 billion which will be allocated to three industries; the sorbitol industry; the plastic packaging industry; and the plastic bags industry.
The Directorate General of Transportations Equipment and Telematics Industries will receive Rp 769.27 billion for four industries including ship building and repairs; motor vehicle components; fiber optic cables; and the electronics and telecommunications equipment industry.
The Directorate General of Metal, Textile Machineries and Various Industries will receive Rp 281.89 billion to be allocated to five sectors and industries including coal-fired power plant components; steel wire manufacturing; ballpoint pen production; heavy equipment production and the plastic-based carpet industry.
The Directorate General of Air Transportations will receive Rp 312 billion to be allocated to the aircraft maintenance industry.
Finally, the Foods and Drugs Monitoring Agency will receive Rp 15.2 billion to be allocated to the infusion pumps industry.
Anggito Abimanyu, head of the Fiscal Policy Office at the Finance Ministry, said Thursday the government had a total of about Rp 500 billion to finance import duty exemptions to be allocated, to be drawn from a total of about Rp 2 trillion in budget allocation set in the revised 2010 state budget.
The government is studying four other business sectors to be provided with such exemptions, he said. "They will be decided within one month," he said.
Finance Minister Sri Mulyani Indrawati expects the import duty exemptions could enhance the competitiveness of industries, which would in turn propel economic growth higher than 5.5 percent.
She also said the import duty exemptions given in the past two years were not "satisfactory" as most industries did not use them.
According to the Directorate General of Customs and Excise, of the Rp 2.5 trillion in import duty exemption allocated for businesses in 2009, only 6 percent were used.
Mulyani said the government has improved regulations and requirements to speed up the use of the import duty exemptions.
To access these incentives, businesses need to submit assessments on the importance of the exemptions requested and the list of goods to be imported, with technical specifications, the Finance Ministry said.
Goods that can receive import duty exemptions are goods that are not produced locally; or goods produced locally but below specifications; or produced locally but in insufficient amount, which mean businesses need to import goods.
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