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Govt to increase service charge at airports, seaports to meet target
The Transportation Ministry, one of the state bodies in charge of infrastructure, is planning to increase service charges at its airports and seaports as it aims at increasing non-taxation income (PNBP)
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he Transportation Ministry, one of the state bodies in charge of infrastructure, is planning to increase service charges at its airports and seaports as it aims at increasing non-taxation income (PNBP).
The ministry, which recorded Rp 7.2 trillion (US$504 million) in the PNBP income last year, targets increasing revenue to Rp 9 trillion this year. To date, it has achieved Rp 614 billion or 6.82 percent of its total target.
Transportation Minister Budi Karya Sumadi said service charges at many ports run by the ministry was lower than charges at major seaports managed by state port operator Pelindo.
“Currently, the charges at the air and sea [ports] in [remote] areas is low. We will increase it within certain limits,” he said on Tuesday.
Budi reiterated that the move will not cause inflation.
“There will be no inflation. [The increase] will be insignificant, for example a charge of Rp 10,000 would increase to Rp 15,000, it’s not a lot,” he said.
He added the cost component for the PNBP is already relatively small.
The move retracted from the ministry’s initial plan to decrease the PNBP charges in its bid to boost the economy and lower logistics costs.
Indonesia has been grappling with high logistics costs, as it contributes between 24 percent and 26 percent to GDP. The figure is higher than in Malaysia, the Philippines and Vietnam, where logistics costs contribute to less than 20 percent of GDP.
The government has targeted to reduce logistics costs to 19 percent by 2019.
President Joko “Jokowi” Widodo has aimed at simplifying logistical processes and lowering costs, including an economic policy package specifically designed to address the issue.
Budi previously said lowering the PNBP charges was expected to boost the volume of trade. It is also intended to improve the country’s position in the World Bank’s Ease of Doing Business (EODB) index, where in 2018 the country climbed 19 places to 72 from its previous rank of 91. By 2019, the country is expected to be ranked at 40.
However, the plan to lower the PNBP charges was also expected to coincide with a lower target for PNBP revenue from logistics.
The government has targeted to increase PNBP income to Rp 275.4 trillion this year from Rp 260.25 trillion last year.
The Transportation Ministry is currently the second largest contributor to PNBP among other ministries.
The ministry previously intended to lower charges at the country’s main gateway, Tanjung Priok Port in North Jakarta, as 50 percent of logistics-related activity took place there.
Budi stated the ministry might still try to lower the PNBP charges at ports, while extending the concession for Pelindo to compensate.
Meanwhile, Transportation Ministry director general for air transportation Agus Santoso denied the plan to increase the PNBP charges at airports, saying the ministry will merely charge more for services such as parking.
“We will only charge more for other services to increase the PNBP revenue,” he told The Jakarta Post on the phone.
He added another way to increase the PNBP revenue was by utilizing idle assets, including land owned by the ministry’s airport authorities, by cooperating with the private sector.
Commenting on the matter, Indonesian National Shipowners Association chair Carmelita Hartoto said increasing the PNBP charges would only burden business.
“Operational costs for shipping will increase. That will burden business, while waiting time at the ports is currently high,” she said.
