Batam City has a vision, as an International Logistics Hub, to support industrial and trade development. The position of MSMEs here certainly does not need to be questionedJakarta (ANTARA) - The Presidential Staff Office (KSP) has encouraged the export-orientation of Micro, Small, and Medium Enterprises (MSMEs) in the Free Trade Zone (FTZ) in Batam, Bintan, and Karimun in the Riau Islands.
KSP Main Expert Agung Kristiyanto made the statement during a coordination meeting with relevant ministries and agencies in Batam, Riau Islands, to encourage the competitiveness of local MSMEs in the global market.
“Batam City has a vision, as an International Logistics Hub, to support industrial and trade development. The position of MSMEs here certainly does not need to be questioned," Kristiyanto stated during a press release here, Friday.
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The KSP main expert later noted that despite MSMEs occupying a large fraction of the business world in Batam, their export contribution had not been maximized.
The Indonesian Young Entrepreneurs Association (HIPMI) of Batam City stated that owners of MSMEs in Batam were facing several challenges in the form of weak business networks and market penetration capabilities, including the lack of capital for business development.
Meanwhile, the competitiveness of domestic market-oriented MSMEs is considered to have decreased after the issuance of Ministry of Finance Regulation Number 199 of 2019 on Customs, Excise, and Tax Provisions on the Import of Consigned Goods.
Several businessmen in Batam had criticized this policy, as goods sold from Batam to other regions in Indonesia were subject to Income Tax (PPh) and Value Added Tax (VAT).
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Kristiyanto affirmed that the regulation, in fact, provided justice with regard to imported products that were resold in the domestic market. Prior to this regulation, several secondhand goods were imported from the FTZ area to be sold in other regions without being subject to import duties.
“Batam is designed for export activity. Hence, the challenges we are currently facing should be used as opportunities to help MSMEs in exporting their products. Moreover, there is already a privilege that all goods from the FTZ area can be exported without being charged with additional tax," he explained.
Currently, the trade minister has several export product development programs, such as the Trade Expo and the Export Coaching Center. However, these programs are still very limited and not yet available in Batam City.
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Translator: Rangga Pandu A J, Resinta S
Editor: Fardah Assegaf
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