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Tax incentive sought for pharmaceutical ingredient producers
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The government is exploring an option to use tax incentives to lure more investors to the pharmaceutical sector. (Shutterstock/File)
T
he Industry Ministry claims that it has suggested the Finance Ministry provide a tax incentive for investors willing to spend money to build production facilities for raw pharmaceutical ingredients.
The ministry’s Director General for Textile, Chemical and Miscellaneous Industries Achmad Sigit Dwiwahjono said his side had suggested an income tax cut for investors willing to spend a minimum of Rp 50 billion (US$3.7 million) and employ at least 25 workers to produce raw material for medicines.
“We’ve suggested that [idea] to the Finance Ministry, be it for those who build a factory in or outside of an industrial area,” he told The Jakarta Post recently.
(Read also: Healthcare biz needs push)
The government has been trying to attract investment to boost local pharmaceutical ingredient production. The country’s pharmaceutical sector currently imports 95 percent of its raw material.
In 2016, the government opened up the entire pharmaceutical sector to foreign investors from the initial 85 percent. However, stakeholders say there has been not much fresh investment since then.
Investment in the pharmaceutical sector has stagnated in recent years, reaching just Rp 8.9 trillion from January 2011 to September 2016, Investment Coordinating Board (BKPM) data shows.
Sigit said the ministry had prioritized medicine firms with higher local content to be listed in state’s e-procurement catalogue.
“More basic materials like benzene, toluene, xylene, phenol, solvent, pharmaceutical salt and sugar are locally available and their production improved to support the making of pharmaceutical ingredients,” Sigit added. (hwa)
