After heightened resistance from service providing associations, including freight forwarders and courier companies, the Indonesian directorate of excise has abolished the regulation 178/2006, which the companies said was business-unfriendly.

Chairman of INFA for Soekarno Hatta International Airport, Arman Yahya said: “We are happy with the decision of the excise directorate. At least the government is listening to us, which hardly happens.”

According to Yahya, the logistics industry is pleased with the issuance of regulation 70/2007, which exempts related companies from the 3 percent withholding tax.

In January this year, nine associations, including INFA and Asperindo, opposed the regulation 178/2006 as it would increase the fi nancial burden on service providers.

“We didn’t agree with the previous regulation because it would have allowed third party (service users) to collect 3 percent of the total charge levied upon them,” Yahya said. He added that the annulment of the withholding tax proved the government’s commitment in improving the investment climate, as well as a support to the logistics and transportation sector. – Siktus Harson