AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Tax-based export incentive
On 1 April 2012, the Indonesian Government installed a new import duty refund scheme.
The initial scheme was introduced in 2008 after the global economic downturn that widely affected the domestic industries
Under the new scheme, registered firms in the country (existence of a registration number (NIPER)) can ask for import duty refund on raw materials if the processing and manufacturing of the products is done in the country. This new scheme aims to promote local production and introduces disadvantages for importers of finished products. Furthermore, the duty suspension also favors Indonesian exporters, hence it implies trade distorting effects with respect to the Indonesian market as well as all of its export markets.
The measure is limited to 13 industrial sectors including stationery, textiles, plastic, telecommunications and fiber optics. It will be expanded to 16 sectors in 2013 and is estimated to amount for Rp 405 billion. (USD 44 million) in 2012 and Rp 706 (USD 72 million) in 2013.
The list of sectors for 2013:
fertilizer, plastic, ballpoint, carpet, heavy equipment, turbine, factory machineries, automotive parts and train, as well as shipyard, non-strategic defense equipment, electronics, optical fiber wire, communication tools, smart card and special ink
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