In mid-November 2014, Industry Minister Saleh Husin, Finance Minister Bambang Brodjonegoro, and Coordinating Minister for Maritime Affairs Indroyono Susilo held a coordination meeting on the shipbuilding industry. There are four points agreed to be further discussed, among other, 0% import duties for certain imported components, simplification of procedures of import duties borne by the government (BMDTP), value-added tax (VAT) 0% option which will be defined in draft government regulation, and amendment of Government Regulation No. 52/2011
In order to cultivate the national shipbuilding industry, the Ministry of Industry is planning to provide fiscal incentives for the shipbuilding industry is planning to provide fiscal incentives for the shipbuilding industry. Thus, the Ministry of Industry is targeting national shipbuilding utilization to reach 50% in 2015. Hasbi Assiddiq Syamsuddin, Director of Maritime, Aerospace and Defense Equipment Industry of the Ministry of industry, in Jakarta (Friday, December 5), considered that fiscal and non-fiscal incentives triggered growth of the national shipbuilding industry which production utilities is about 35%.
He said that the government is undertaking harmonization of some polices, ranging from 0% VAT relief for imported components, income tax, and BMDTP incentive. First, 0% VAT relief for imports of ship components and income tax. Second, BMDPT incentives. Third, imposition of import duty for imports of new and used ships. Fourth, draft government regulation non-taxable facilities. Additionally, Indonesia will gradually begin to restrict imports of used vessels so that the local industry could grow.
He is optimistic that the plan of providing fiscal incentives and non-fiscal incentives from the government for the national shipbuilding industry. He added that the industry will absorb more workforce in the shipyard industry. In addition to fiscal incentives, he explained that the Ministry of Industry also prepares non-fiscal incentives, such as land rental rates, especially for the old shipyard which operates on land owned by state-owned enterprises and the navy.
He said that the policy is still under calculation so that it could be well targeted. It is said that relaxation in the form of fiscal and non-fiscal stimulus will cause faster growth of the industry in line with the acceleration of government’s sea toll project. According to him, the shipyard industry has been forced to build ships at higher prices compared to foreign products because cost of imported components is subject to import duties so that are unable to compete.
Meanwhile, industry players doubt the effectiveness of underwriting of import duties by the government for a three-year quota for the shipbuilding industry. Chairman of the Indonesian Shipbuilding and Offshore Industries Association (iperindo), Eddy Kurniawan Logam, considered that the BMDTP incentive option is difficult to be implemented. Moreover, if the government set BMDTP to be applicable for import plan to meet the needs for three years.
The difference between the process of making a new ship and motor vehicle refers to a very specific design. A ship was made highly adjusted to the specifications provided by costumers. Therefore, it is difficult to predict the brand and type of components to be used for three years. BMDTP is one option of fiscal incentives that will be given by the government to the shipbuilding industry. Fiscal and non fiscal relaxation is entirely contained in the specific proposals formulated by the taskforce. However, Eddy still gives appreciation to the government on the incentive plan. He hopes that the government can implement policies that have a real impact and easy to implement so that the shipbuilding industry can rise. (E)
Business News - December 10, 2015