Indonesia government considers giving incentives to shipyard industry

JAKARTA (Rambu Energy) – Finance Minister Bambang P.S. Brodjonegoro said the government considers giving incentives to spur the growth of shipyard or shipbuilding industry in the country.

He made the comment last week after holding a meeting with the Coordinating Minister for Maritime Affairs Indroyono Soesilo silo and Industry Minister Saleh Husen.

The first incentive is related with value added tax (VAT). The government wants to ensure that the VAT will not disadvantage the shipbuilding industry. Second is reducing import tax on ship or vessel components, which is currently burdening shipbuilding companies.

The third incentive is the simplification of procedure for import duties that are covered by the government, called Bea Masuk Ditanggung Pemerintah (BMDTP). The fourth is granting tax income facilities (PPh) thorugh tax allowance for shipbuilding industries.

The government made the move after shipbuilding industries calling on the government to support the development of shipbuilding industry in the country. One of their demands is the scrapping of import tax on shipbuilding components because the import tax causes domestically made ships or vessels to be less competitive than importing build-up vessels.

The decision to give incentives is also a move to support the Joko Widodo government’s drive to implement the maritime-axis vision.

Minister Indroyono Soesilo last week visited shipyards in Surabaya as well as Batam to get first-hand picture of the shipbuilding industry.

Soesilo said President Joko Widodo is eager to support the shipbuilding industry. Currently, there are 198 shipyards in the country, 110 of which are spreading in Batam, Riau province and 88 shipyards are located in other places including Surabaya. In Batam alone, the shipyards employ around 120,000 workers. (*)