Indonesia to make it less painful for exporters to keep earnings onshore -official

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JAKARTA : Indonesia is developing a scheme for banks to provide a financing facility for exporters who keep their earnings onshore, after business groups complained that new rules made it harder to cover operational costs, a government official said.Under a rule introduced earlier this month, natural reso

JAKARTA : Indonesia is developing a scheme for banks to provide a financing facility for exporters who keep their earnings onshore, after business groups complained that new rules made it harder to cover operational costs, a government official said.

The regulation, which was intended to boost domestic foreign exchange supply, has sparked a backlash from exporters who said parking funds for three months took away cash needed for operations. Eddy Martono, chairman of the Indonesian Palm Oil Association, also complained that companies must set aside funds for operational costs if they were unable to use some of their revenues for three months.Ferry Irawan, senior official at Indonesia's coordinating ministry of economic affairs, told Reuters the government is finalising rules to address exporters' concerns.

Authorities are also working on new tax incentives that will ensure an attractive return for exporters' funds parked onshore, which will be competitive with returns offered for term deposits offshore, he said, without elaborating.

 

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