Government plans to raise export taxes on raw leather

11 September 2002

The Indonesian government plans to reimpose export duties on raw materials to ensure sufficient supplies of the commodity on the local market, according to a senior official at the Ministry of Industry and Trade. Ferry Yahya, the ministry's director of agricultural and mining product exports, said the export duties would be set at between 20% and 25%, compared with zero per cent at present. Minister of Finance Boediono has in principle agreed to reimpose the export duties. We are now waiting for the issuance of a ministerial decree', said Ferry, adding that the new policy was in line with demands from the industries that relied on raw leather. Calls for the reimposition of the export duties have come from the Indonesian Tanners' Association and the Indonesian Footwear Association, both of whom claimed the zero duty policy applied by the government to raw materials had resulted in supply shortages on the local market, thus hurting their businesses. They also called on the government to ease the rules curbing the commodity's importation.

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