Customs And Excise Spreads Incentive Facilities To Boost Domestic Industry

Director of Customs and Excise Facilities, Untung Basuki (right) at a media briefing in Jakarta (Photo: Screenshot of Customs' virtual channel)

JAKARTA - The Directorate General of Customs and Excise of the Ministry of Finance (Kemenkeu) is said to continue to provide a number of fiscal incentives through various customs facilities to increase the competitiveness of domestic industries and support the increase of export products.

Director General of Customs and Excise, Askolani said that one of the important concerns was the manufacturing sector. According to him, there are four customs facilities provided, namely KITE (Ease of Import for Export Destinations) IKM (Small and Medium Industries), Liberation KITE, Return KITE, and Bonded Zones.

“Each one provides different fiscal incentives, depending on its designation. The provision of customs facilities is aimed at attracting investment, increasing exports, state revenues, and efficiency in production and logistics costs," he said when meeting reporters via virtual channels, Thursday, June 2.

Askolani disclosed that the IKM KITE Facility is provided for the import of raw materials, auxiliary materials, packaging materials, sample goods, and machinery with fiscal facilities in the form of exemption from import duties and is not subject to Value Added Tax (PPN) and Sales Tax on Luxury Goods (PPnBM).

"This limits the investment value up to Rp. 15 billion and the maximum sales proceeds is Rp. 50 billion," he said.

Meanwhile, for imported goods other than sample goods and machines, they receive a Return KITE facility without any restrictions on the investment value.

"The difference is, the Liberation KITE provides fiscal facilities in the form of exemption from import duties and does not collect PPN and PPnBM imports, while the Return KITE provides fiscal facilities in the form of import duties that are paid in advance and then returned (drawback)," he explained.

On the same occasion, Director of Customs and Excise Facilities, Untung Basuki, said that the provision of fiscal incentives through customs facilities was considered effective in growing the economy through increasing export performance.

In his records, the value of exports throughout 2021 reached US$88.29 billion or grew by 43.56 percent on an annual basis (year on year/yoy).

"To maintain export performance, Customs and Excise continues to explore export potential, especially for MSMEs, one of which is the export clinic program," he said.

Untung explained that the export clinic is a program provided by Customs and Excise by providing education, literacy, assistance to companies that have already exported or are about to start exporting.

"We hope that the various customs facilities provided can increase the competitiveness of the industry and domestic foreign exchange so that companies can absorb workers and encourage economic growth and people's welfare," he concluded.