The Association of Indonesia Importers and Distributors of F&B products (APIDIMI) stated that increased taxes on imported beverages products might trigger smuggling of alcoholic drinks. Agus Silabanm Chairman of APIDIMI stated on Friday (24/7) that in the Regulation of the Ministry of Finance No. 132.0.10/2015 on the Stipulation of Goods classification and tax exemption on imported products it was stated that import tariff for beverages with alcohol content of less than 80% was 150% of basic price.
On beverages of fermeted fruits with alcohol content of 15% - 25% tax of 90% of basic price was imposed while for drink while for drinks with alcohol content below 15% tax of 90% was imposed. “If taxes were too high, smuggling practices would be at large and the Government would not get anything” Agus said.
For that matter Agus said, importers objected to the Government’s policy to increase taxes on imported alcoholic drinks. Moreover he said the Government did not involve businesspeople in making the Regulation. Agus admitted he was upset with the Government’s policy to increase import tax. Agus said that the one sided policy would not only kill alcoholic drink business would also enhance smuggling.
Agus said that the circles most advantaged by increase of taxes were corrupted officials who had been protecting smugglers. Meanwhile the Government who was supposed to collect income from imported alcoholic drinks would be disadvantaged because income from import would drop. Agus argued that the Government’s reasoning of protecting domestic industry by imposing high import tax was unwise.
He said that act of hooliganism by drunkard was not because of low import tax of alcoholic drinks but because law enforcers failed to prevent smuggling.
Agus further remarked that the more stringent the regulation to restrict alcohol consumption the higher circulation of illegal drinks would be.
Agus disclosed that selling price of alcoholic drink in Indonesia was the most expensive in the world. The reason was that the tax component included therein made the price sixfold or 600% more expensive than the basic price. Now with tax structure could be 900%.
According to Agus increased import tax would almost certainly drop sales figures. All in all importing process would be disturbed and state’s income would be reduced.
He said that there was anomalous marketing of beverages due to high Government’s income tax which was indicated by import quota which was lessened year after year. He rated that sales of legal alcoholic drink which shrunk was in reserve with smuggling of alcoholic drinks which constantly increased.
Meanwhile the Minister of Trade Rachmat Gobel denied that increase of import tax for alcoholic drinks would kill the business. He said that so far he had not approved the precentage of import tax for alcoholic drinks because he wished to know the underlying formula of the pricing, Minister Gobel stated that had not set up an evaluation team in regard to that matted. The proposal was still at the stage of dissecting and had not become recommendation. (SS)
Business News - July 28, 2015