Finance Minsitry Issued Four Minister's Regulations

Jakarta, Aug 28 (Antara) - The Finance Ministry issued four Minister`s Regulation as the package to guard the economic growth and stability in August 2013. "The current global economy condition which is not really favorable and affects the national economy recently feared to disrupt the momentum of economic growth, therefore the government announced the four policies last Friday," the Finance Minister Chatib Basri said here on Wednesday. Basri stated that he revised and issued four Minister`s Regulations as the part of second package to guard the economic growth and people`s buying power. He mentioned the four policies are including policy`s relaxation on bonded zones, removal of the Luxury-Goods Sales Tax (Luxury Tax) for several products which is no more classified as luxury goods, granting the exemption of Value Added Tax (VAT) on the imports or delivery of books and the magnitude reduction of Income Tax of Article 25 and the delay of Income Tax Article 29 payment for certain taxpayer industries. He explained that the Minister`s Regulation No.147/2011 on Bonded Zones manage about local sales, location regulations, subcontracting and simplification of inclusion of capital goods licensing procedures. "The additional of local sales allocations for all types of goods supplied from 50 percent of the exports," he said. Basri said that in order to achieve the approval of Customs and Excise Office local sales limit greater than 50 percent must include the Industry Ministry`s recommendation. Regarding the location regulation, a new bonded zones company with at least one hectare area must apply for a bonded zones` permit after the Minister`s Regulation No. 147/2011 valid, while the existing bonded zones companies allowed to extend the permit, including the company which facilitating the exemption and refunds of duty in order to exports. "Related to subcontracting, bonded zones company may subcontracted a part of their main production to the local companies," he said. Meanwhile, for the simplification procedure of capital goods imports, including factory equipments or spare parts, it is only need the permission of local customs service office, or no longer needed to go to the territorial office for the efficiency. The second policy, related to the removal of Luxury Tax which according to the Minister is to aim the limitation of taxable goods. He mentioned that a several goods which is no more classified as luxury goods are household appliances at a price of Rp5 million or Rp10 million, television broadcast receivers with price below Rp10 million and 40 inch, refregirator below Rp10 million price, air conditioner with price below Rp8 million, water heater and washing machine with price below Rp5 million, projectors and sanitary products below Rp10 million price. "The policy expected to control the commodity prices more affordable and the market will be more passionate," he said. Meanwhile, he added that it is aim to improve the domestic products performance especially in order to compete with illegal imported products. Basri explained the third policy is about the VAT exemption for the imported books or books delivery, in order to broaden the facility`s scope which is now not only limited to general education books and holy books and religions lessons, but also to all nonfiction books without having to have the related ministries` recommendation. The fourth policy, as he explained is a form of Income Tax incentives, which is reduce the 25 percent rate of Income Tax of Article 25 for the taxpayer without exports orientation, while for the exports orientation to received 50 percent tax reduction in August 2013 period. In addition, govt also implemented relief of Income Tax article 29 2013 payment of three months from the indebted date as well as the elimination of administrative penalties for the payment delays. Basri explained that the Income Tax incentives apply to several industries, including textiles, apparel, footwear, furniture and children`s toys in order to prevent the labor-intensive industries do not take a termination of employment action to their employees.