Import Duties and Taxes Constrains Implementation of Green Freight in Indonesia

By : Ridwan And Aldi Firhand. A | Sunday, March 04 2018 - 21:50 IWST

Materials Logistics in Indonesia
Materials Logistics in Indonesia

INDUSTRY.co.id - Bandung, Implementation of green freight in Indonesia is considered not effective, even still a few goods transport companies that have applied it.

Some actors still consider the application of green freight as something expensive because of high investment cost, so it is considered contrary to the principle of business oriented to the achievement of profit (profit).

The efficiency gained from the application of green freight in the long run can be expected to exceed the value of investments issued, so companies must make the right investment strategy to gain sustainable competitiveness.

Chairman of Supply Chain Indonesia (SCI), Setijadi said, one of the main obstacles faced by transportation business actors is the cost of replacing the fleet. The expensive price of each unit of the fleet is due to the burden of import duties (BM) and taxes (VAT, PPH, BBN, and PKB).

"Based on the analysis of Supply Chain Indonesia (SCI), the total value of import duties and taxes is approximately 52.5% of the factory price of each unit of the fleet," said Setijadi via press release in Bandung, Sunday (4/3/2018).

Said Setijadi, in addition to the new investment (replacement fleet with a more environmentally friendly), the implementation of green freight can be done through operational practices that are efficient and environmentally friendly.

"For example, eco-driving, the application of strategies, engineering, and operational efficient transportation, including the use of information technology," he explained.

In addition, he added, green freight can also be done with collaboration between actors (between transportation companies or transportation companies and manufacturers / retailers). "For example the arrangement of delivery schedules and loading-unloading of goods," said Setijadi.

According to Setijadi, in addition to business actors, the application of green freight involves many parties. For example, truck manufacturer (fleet producer), Ministry of Industry (motor vehicle design), Ministry of Transportation (type and test of periodic exhaust emission of motor vehicles), Ministry of Environment (threshold exhaust emission), Ministry of ESDM (development of material specification fuel), Pertamina (production and distribution of fuel), and Police (enforcement of regulations).

SCI formulates several recommendations for the implementation of green freight for the government and stakeholders, among others, First, the granting of incentives in the form of abolition or reduction of import duties and taxes for the purchase of environmentally friendly fleets.

Second, the provision of fleet financing procurement scheme with competitive interest (7-8%) because of the prevailing commercial interest (12-15%). Third, the increasing number and deployment of environmentally friendly refueling infrastructure and facilities.

Fourth, improvement of fuel quality and fuel conversion program. Fifth, Improving the understanding and competence of business actors regarding the concept and application of green freight. And finally, the corporate tax relief incentive for actors applying green freight.

News Comment

Today's Industry

GoTo is a blend of Gojek and Tokopedia. (Photo: republika.co.id)

Jumat, 02 Desember 2022 - 22:48 WIB

Lockup Sentiment Only Temporarily, GOTO Owns Chance to Rebound

Shares of PT Goto Gojek Tokopedia Tbk (GOTO), which experienced selling pressure after end of the lock up period on November 30, 2022, are considered by a number of market participants to provide…

GoTo is a blend of Gojek and Tokopedia. (Photo: republika.co.id)

Rabu, 30 November 2022 - 19:35 WIB

GoPay's Dominance Drives Consistency in GOTO's Financial Business Segment Growth

The financial services business segment, namely GoTo Financial owned by PT GoTo Gojek Tokopedia Tbk (GOTO), recorded impressive business growth consistency. This is reflected in GoPay's dominance…

The President Director of PT Honeywell Indonesia, Roy Kosashi, clarified many kind of leading technology for Indonesia’s New Capital City, in Jakarta on Tuesday (29/11/2022). (Photo: PT Honeywell Indonesia)

Rabu, 30 November 2022 - 19:28 WIB

Honeywell Ready to Support Indonesia’s New Capital City with Sustainability Technologies and Solutions

Honeywell announced today that it is Ready Now to support the Nusantara Capital Authority (OIKN) in realizing their goal of making a sustainable and smart forest city. OIKN is the government…

Gibu Mathew, Vice President and General Manager in Asia-Pacific (APAC) in Zoho Corp. (special)

Rabu, 30 November 2022 - 11:22 WIB

How to Make SaaS Work for Small and Medium-Sized Businesses

Southeast Asia's digital transformation has been impressive as the region is now poised to reach a projected digital economy worth USD360 billion by 2025. With digitalisation, the region bore…

PT Dharma Polimetal ("Dharma Group") Triputra Group automotive component manufacturing company.

Senin, 28 November 2022 - 12:15 WIB

DRMA Remains Optimistic 2023 Automotive Still Rises, Targets Sales Up 20%

PT Dharma Polimetal Tbk (“DRMA”), a listed company engaged in automotive component manufacturing business sees the prospects for the automotive business in 2023 will still remain promising.…