Chadi Nehme, managing director of PT Energy Logistics, talks to TOGY about the impact of Indonesia’s cabotage law on offshore projects as well as local vessels’ capacity for serving this market and how authorities can improve customs processes. PT Energy Logistics is an integrated logistics company that serves oil and gas companies operating in the Indonesian market, providing customs brokerage and ship agency services.
How has Indonesia’s Customs clearance system improved?
The Customs clearance process has been drastically improved with the introduction of an online system to declare imports. Just five years ago, almost everything was done manually with a lot of paperwork resulting in lengthy processes for clearing and releasing the goods out of the Customs zones.
The Indonesian Customs Department now has a user-friendly website that allows operators to go online, describe the goods and declare a harmonised code for those goods. The website also lists the restrictions or the permits needed to clear the goods.
The taxes are dependent on the harmonised tariff schedule, but generally value-added tax is 10 percent, and the withholding tax is 2.5 percent, provided the importer has an import license. This allows us to prepare documents ahead of time, which enables our clients to check for any corrections to be made before inserting the data in the website.
What is the attitude concerning the development of Indonesia’s logistics and maritime infrastructure?
Developing maritime infrastructure is President Joko Widodo’s top priority, which is welcomed by the industry. A great deal must be done in remote areas, such as eastern Indonesia, where basic infrastructure such as roads is lacking. The port of Surabaya is located in eastern Java but is occasionally used to serve regions as far away as Papua as eastern Indonesia still lacks the jetties and discharging facilities that vessels require.
A positive step in that direction is the maritime toll road, which intends to create a transportation system that will link thousands of Indonesian islands to the western regions of the country. This will result in cutting freight costs by up to 50 percent.
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