Procurement of Transjakarta Bus Possibly Exempted from Import Duty

Jakarta, 30/12/2013 MoF (Fiscal) News - Minister of Finance M. Chatib Basri said that the Ministry of Finance (MoF) was awaiting an answer from the Provincial Government of Jakarta on public transport procurement.

Minister explained, in a letter submitted to the MoF a month ago, the government of Jakarta was not clearly mentioned whether the procurement would be performed by using the local carrosserie or imported products. Nevertheless, the Minister said that granting exemption of import duty was still possible for import procurement of TransJakarta bus because the incentive was available for public transport. "If the local government of Jakarta decides to import (the bus), according to regulation, zero-percent import duty might apply for public transport," he said.

However, if the government of Jakarta chooses import procurement, continued the Minister, it will indirectly harm domestic bus manufacturers or local carrosserie company. "If they (Jakarta government) wants zero percent of import duty, they must give explanation to carrosserie because the domestic industry could be affected," explained the Minister.

Previously, Governor of Jakarta Joko Widodo wished that the central government would exempt import tax of TransJakarta bus in order to support the provision of public transport. The government of Jakarta will buy 310 units of articulated buses from China and 346 middle-sized buses up to January 2014. Until Monday (23/12), 96 units of articulated buses have entered the Tanjung Priok Port. Data of Jakarta Transportation Department shows that the number of TransJakarta bus operating currently is 579 units, consisting of 381 single units and 198 units of articulated buses. Throughout 2014, the government of Jakarta plans to tender the procurement of 1,000 units and 3,000 middle-sized units of TransJakarta bus through the e-catalog system.