Maritime Affairs Ministry Enhances Investments Through Incentives

Jakarta, June 26 (Antara) -- The Ministry of Maritime Affairs and Fisheries has boosted investments through a tax allowance policy for businesses in the marine and fisheries sectors in Indonesia. "To improve the investment climate and economic growth, the government has issued a regulation that establishes fiscal incentives in the form of a tax allowance for certain business fields and/or in certain areas," Director General of Fisheries Processing and Marketing Saut Hutagalung said here on Friday. Hutagalung added that the incentives will be awarded to taxpayers in the country who attract foreign and domestic investments. It will also be awarded to those who have a high investment value or investments for export and to those with a large number of employees or high local content, as well. The incentives to be provided include net income reduction by 30 percent of the amount of investment that is charged for six years, 5 percent per year, since the beginning of commercial production. Other incentives include the acceleration of amortization, the imposition of income tax on dividends paid to foreign taxpayers by 10 percent, or lower tariff by double taxation treaties, and compensation for losses incurred for more than five years but up to 10 years. Earlier, Minister of Maritime Affairs and Fisheries Susi Pudjiastuti had stated that the amount of credits allocated by banks for traditional fishing in various regions in Indonesia was still relatively low as compared to the amount of loans allocated for other sectors. Data from the Financial Services Authority (OJK) reveals that the bank loans allocated for the maritime sector reached merely Rp17.6 trillion, which is some US$1.3 billion, in December 2014. In addition, the loan assigned for the maritime sector was only 0.49 percent of the total loans allocated by the banking industry, which amounted to Rp3.6 trillion. Of these amounts, 75 percent of the loan allocated for the marine and fisheries sectors was working capital, while the remaining 25 percent was investment capital. "The business sector in the marine and fisheries field has potential but requires considerable funding," the minister emphasized. This year, the OJK aims to hike the loan allocated for the marine and fisheries sectors by 67 percent, i.e. it has set a target of allocating Rp29 trillion, which is some US$2.1 billion, for the sectors in late 2015.