ndonesia to scrap 10 pct VAT on foreign liners
ndonesia to scrap 10 pct VAT on foreign liners
The Indonesian government plans to scrap a 10 percent value added tax (VAT) currently imposed on foreign liners in its efforts to reduce the high-cost of doing business in the country, reports said Wednesday.
The plan comes following an earlier decision to lower freight handling fees at ship ports, said The Jakarta Post newspaper.
The decision was taken by an inter-departmental team as a reciprocal measure in line with global trade practices, as no other country in the world imposed such shipment duties.
Shipping associations have long complained about the duties as well, arguing that it only burdened overseas shipments with unnecessary costs.
“The finance, trade and transportation ministries have agreed to scrap the 10 percent value added tax (VAT) currently charged on all export and import shipping services by foreign liners,” Minister of Transportation Hatta Radjasa was quoted as saying.
“We are currently revising it, and will soon announce its implementation,” he said.
The decision was also expected to support the government’s earlier efforts in reducing high-cost economy components in the transportation sector, by lowering last year the terminal handling charge (THC) for 20-foot containers at all domestic ports from 150 U.S. dollars to 95 dollars, in comparison with other ports in the region.
Hatta explained that last year saw a 10.7 percent increase in Indonesian vessels used for domestic cargo delivery, to 6,689 vessels from 6,041 previously.
More: vat-experts.info