Indonesian tanners call for reintroduction of hide export dutie
The Indonesian Tanners Association has renewed calls for the government to reimpose export tax on raw hides to boost flagging domestic supplies, as many tanneries in the region around Jakarta have closed or are facing bankruptcy due to limited supplies of raw materials.
The government removed the export tax on hides in 2000 to meet the economic reforms stipulated by the International Monetary Fund (IMF). The current situation is made worse with the reduction of exports from countries such as India, Pakistan and Brazil; and the Indonesian Ministry of Agriculture’s ban on the import of hides in 2001 amid foot and mouth fears.
One consequence has been the mass redundancy of tens of thousands of tannery workers. Indonesian Tanners Association chairman, Diyono Hening Sasmito has warned that thousands more will become jobless unless the government reinstates export taxes.
This downturn in the Indonesian leather industry is also impacting the country’s footwear industry, another mass employer and one of the country’s major contributors of foreign exchange earnings. Discussions between the tanners’ association, supported by other industry bodies, the Ministry of Trade and Industry, and the Ministry of Agriculture are ongoing.
