The government has introduced what it calls an Export Purposed Import Facility (KITE) to annul import taxes and other tariffs for export-oriented small and medium enterprises (SMEs).

The measures would reduce production costs for export-focused businesses by up to 25 percent, President Joko “Jokowi” Widodo said when launching the policy in Tumang Village, Boyolali, Central Java, on January 30.

Some manufacturing SMEs have to import machinery and raw materials, such as copper, stainless steel or even human hair from other countries, such as Taiwan and India.

“We hope that this program can boost exports by reducing SME’s manufacturing costs,” Jokowi said.

So far 22 SMEs from Central Java, Yogyakarta, Bali and West Nusa Tenggara are benefiting from the facility.

SMEs can apply for it by registering with the customs office, with the requirement that at least 75 percent of their production must be exported.

Those SMEs will also get access to loans (KURBE) from the Export Financing Agency, also known as Indonesia Eximbank, at a 9 percent annual interest rate. Indonesia Eximbank managing director Indra Supiadi said it would provide coaching to the exporters.

“Last year we created five new exporters in [the business fields of] modified cassava flour, broomstick, room insulator, catfish fillet and frozen beef,” Indra said.

Source: The Jakarta Post