TEMPO.CO, Jakarta - The Directorate General of Customs and Excise has decided to facilitate capital goods and raw material imports for small-medium enterprises (SMEs). The initiative is expected to reduce production costs and at the same time, increase cash flow. The new regulation is also hoped to improve businesses activities in the domestic and international market.

"Import and export process will be facilitated [by providing] simple import procedure, selective physical examination, postponing import restrictions, and simplifying imports through a special app," said Finance Minister Sri Mulyani on Monday, January 30, 2017.

The Directorate General of Customs and Excise has decided to exempt SMEs from import duties, value-added tax, and luxury goods tax. Sri hoped that the incentive could rejuvenate exports, absorb more workers, and encourage the creation of SME-based tourism.

The Central Statistics Agency (BPS) recorded that the micro, small, and medium enterprises sector are able to absorb 97 percent of manpower from the total employment rate. The number is considerably larger than the level of employment absorption from major corporations. SMEs also contributed to 61,41 percent of Indonesia's gross domestic product.

Director General of Customs and Excise Heru Pambudi said that SME business owners must own an industrial permit in order to obtain these incentives. In addition, owners are also required to operate a customs module specifically created for KITE (Export Purposes Facility), and have at least settled in a certain business location for two years.

Meanwhile, administrative requirements for the incentives include owning a Taxpayer Identification Number (NPWP), SPT (tax return), production plan, and a public notary statement letter.

PUTRI ADITYOWATI