Indonesian export tax on hides now ‘urgently required’
In a bid to help to the country’s ailing tanning sector, the Indonesian Minister of Industry and Trade, Luhut Panjaitan, has called on the government to reintroduce the country’s export tax on raw leather.
In an open letter of recommendation to the minister of finance, Prijadi Praptosuhardjo, Panjaitan stated that a tax in the region of 20% to 30% was now urgently required, as most of the country’s supplies of hides were disappearing overseas, where higher prices are paid. "Without the protection, it will be difficult to develop the tanning industry," said the minister.
Together with a general slowdown in the export of hides from countries such as India, Brazil and Pakistan, the absence of tariff protection means that almost half of Indonesia’s tanneries had disappeared since the original levy was lifted in April 2000.
The chairman of the association of the Indonesian leather tanning industry, Diyono Hening Sasmito, says that before the export tax was removed, Indonesia had over 600 tanneries, producing over 49,000 tons. Now, there are only 366, with a total output of 17,850 tons.
Industry campaigners are now expected to approach the Indonesian House of Representatives for support.
