Gov’t Encourages Exporters to Increase Wood Export

Coordinating Minister for the Economy Darmin Nasution delivers a press conference after attending a Limited Cabinet Meeting at the Merdeka Palace, Jakarta, Tuesday (10/9). Photo by: Agung/PR

The Government encourages furniture exporters to take advantage of the open market in the United States following the country’s trade war with China.

“The United States’ demand for furniture is about US$ 96 billion per year. The question is why the total of our furniture exports dropped slightly. It’s not a lot but it decreases,” Coordinating Minister for the Economy Darmin Nasution told the reporters after attending a Limited Cabinet Meeting on Increasing Furniture Exports, Rattan and Wood, at the Merdeka Palace, Jakarta, Tuesday (10/9).

Darmin added that despite not involving in the trade war, Indonesia has not been able to take advantage of the large American market.

The Coordinating Minister added that during the meeting, the Government sought the possibility to increase and accelerate exports of wood, wood products, furniture and rattan. The Government, he added, paid attention to a number of complaints from entrepreneurs, including 10% Value Added Tax (PPN) of wood logs.

“Minister of Industry said that he has discussed with Ministry of finance on the possibility to remove (the tax),” Darmin explained.

The exporters also complained about the financing, citing the gap between deposit interest rate (5%) and financing rate (12%). Darmin said that he will discuss the matter with the Financial Service Authority (OJK) and Banking sector.

The exporters also complained about the obligation to comply with the SVLK (Wood Legality Verification System) even when they export to the countries that do not require the SVLK.

“They know that the Government has an agreement (on SVLK) with the European Union. The existing Regulation of Minister of Trade stipulates that all wood exporters must comply to the SVLK even when the export target countries do not require it,” he said, adding that there are only four countries that require the SVLK, namely the EU, Canada, Australia, and the United Kingdom.

“It makes sense, but the Regulation of Minister of Trade must be reviewed,” Darmin said, adding that the cost for the SVLK was around Rp20 million-Rp 30 million. He also asked the exporters to be more open and to find business partners.

Translated by: Ridwan Ibadurrohman
Edited by: Mia Medyana