Indonesia govt projects shipyard utilization to rise to 50% in 2015

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JAKARTA (Rambu Energy) – The Industry Ministry projects that the utilization of shipyard industry to rise to 50 percent in 2015, up from 35 percent in 2014. The rise is partly driven by the planned fiscal and non-fiscal incentives to be provided by the government.

Director for Maritime, Aerospace and Defense Industries at the Industry Ministry Hasbi Assiddiq Syamsuddin was quoted by Bisnis Indonesia as saying that the government targets to further lift the utilization to 90 percent in next five years.

He said at present the government is in the process of harmonizing various policies including easing value added tax (VAT) on vessel imported components, income tax (PPh) and levy on imported products that are covered by the government (BMDTP). On VAT of imported vessel components, the government plans to cut it to 0 percent, from 10 percent at present.

Shipbuilding operators have requested the government to scrap the VAT on imported vessel components as it discouraged shipbuilding companies to build vessels. Shipowners prefer to import build-up vessels as there was no VAT on imported build-up vessels.

He added the government is also planning to gradually limit the imports of second-hand vessels to encourage domestic shipbuilding and supporting industries. (*)