13 industrial sectors will get new import duty facility
Local business players can utilize government-paid import duty (BMDTP) incentives starting from next month as the facility has been approved by the Finance Ministry, an official says.
“It seems they [business players] can access it next month because the excise and customs [office] has signed it,” Industry Ministry’s director for industry climate and quality policy research center Haris Munandar told The Jakarta Post on Friday.
The facility, which will be regulated under a Finance Ministry regulation, will cover 13 industrial sectors, including stationery, textiles, plastic, telecommunications and fiber optics. The value of import duties to be paid by the government under the facility is estimated to reach Rp 405 billion (US$43.74 million).
Any producer who has a good track record and has not broken tax rules will be eligible to access the facility as long as they have yet to utilize another facility; particularly one technically known as KITE, such as a lower or refund facility for import duty, value added tax (PPN) and luxury tax on imported materials for further
“Producers should request the Industry Ministry obtain the facility and later, PT Surveyor Indonesia will verify their eligibility. The process may take around one to two weeks,” Haris said, adding that the final approval would be issued by the finance minister.
The government-paid an import duty facility that had been made available to local producers since 2008 after the global economic crisis and was aimed at boosting the competitiveness of the domestic industry.
The facility will be applied for goods that have not been locally produced and goods that had been produced locally but are not sufficient or cannot meet specifications required by the industry. In addition to this, the facility also covers goods imported for re-selling in the domestic market to support the industrial competitiveness and goods affecting the public.
In the past, the facility has been criticized by local industrial players as they could not take full advantage of it due to the long period needed for the issuance of the implementation ruling. In 2011, for example, only 20 percent of Rp 285 billion government-paid duty facility could be obtained by producers because the facility was only accessible in the last two months of the year.
Indonesian Textile Association chairman Ade Sudrajat welcomed the faster approval of the facility, as textile producers could not enjoy its maximum benefits due to its approval at the year ends.
“BMDTP is really necessary for the local industry as it solves the problem in our supply chain by harmonizing the tariff at the end products,” he told the Post. Local products such as other products elsewhere have been affected by disharmonized tariffs resulting from trade agreements. Imported raw materials often receive higher import duty compared to end products.
Indonesian Downstream Plastic Producers Association chairman Tjokro Gunawan also expected that the plastic industry could better utilize the facility considering the faster approval.
“At least we can access it for about half a year,” he said, adding that it would help stimulate growth of the downstream plastic industry this year.