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Jakarta Post

Textile producers call for industrial blueprint, VAT exemption

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Tue, September 17, 2019   /  11:18 am
The Jakarta Post Image
Women workers arrange garment products in a factory in Central Java. Textile producers have asked the government to exempt locally produced raw materials from value added tax (VAT). (Antara/Saptono)

During a meeting with President Joko “Jokowi’ Widodo on Tuesday, local textile businesses asked the government to provide a clear industrial blueprint and fiscal incentives for producers who use local raw materials. “The government has already provided tax waivers for materials for export-oriented goods [KITE]. Why can’t it also create similar incentives for locally sourced raw materials? So domestic supply chains can be integrated,” said Indonesian Textile Association (API) chairman Ade Sudrajat Usman at the Presidential Palace on Monday. At present, only imported raw materials that will be used for export-oriented textile products are exempted from import duties and valued added tax (VAT). Under the current situation, producers who use imported raw materials are exempted from VAT, while producers that use local raw materials have to pay VAT u...