FOR 200 DAYS 20% SAFEGUARD TAX TO BE IMPOSED ON IMPORTED FLOUR

About wheat, the Indonesian Trading and Security Committee (KPPI) had begun survey on August 24, 2012.  While survey was underway, the Association of Indonesian Flour Producers (APTINDO) on October 1, 2012 made a request to the Indonesian Government to impose Temporary Act of Security Tax (BMTPS). KPPI had recommended application of BMPTS and was approved by the Ministry of Trade.

As published in the press release of the Min­istry of Trade, according to Chairman of the Indone­sian Trading and Security Committee (KPPI) Bachrul Khaki, today the Minister of trade had consulted the related Ministers for the nation’s interest. The size of BMTPS Tax was 20% of the imported wheat value and would he imposed for 200 days.

BMPTS for flour and wheat would be imposed on items of any country of origin, except those origi­nating from developing countries whose market share was not more then 3% or accumulatively not more than 9% (accumulative amount of goods from devel­oping countries whose market share was not more then 3%). For 200 days KPPI would conduct investi­gations to decide whether or not to recommend impo­sition of BMTP by request of APTINDO.

“In handling those cases we strive to perform our duties objectively, transparently in accordance with the effective law” Bachrul was quoted as saying Aptindo’s Request.

Meanwhile Executive Director of Aptindo Rama Sari Loppiee had asked for the Government to support the petition to investigate due to the land sliding import of flour and wheat to Indonesia, where associations had asked for the application of BMIP and they also requested BMIPS to be applied in tan­dem with the investigation. Meanwhile the Association reasoned that BMIPS was proposed on October 1, 2012 as there were still imported goods priced at dumping priced; and the Association disclosed that there had been irreparable damage, i.e. serious injury on four new industries and that the problem could only be solved by Government’s intervention by way of protection. Very frequently selling price of local products had to be lower then even the price of raw materials because they had to compete against im­ported goods by dumping. Meanwhile local industries had to struggle to survive to maintain the employed workers by way of selling products below production price and consequently debt had to be bigger than receivables.

The Association also stated that Aptindo’s pe­tition for dumping had been cancelled because it had expired. Meanwhile the reason for proposing safe­guard for trade protection was because of increased export volume through 2008, 2009, 2010, 2011 and Q-1 and Q-2 of 2012.

Meanwhile downturn of imparted goods in 2011 was thankfully because some importers were beginning to operate as producers such as Lumhung Nasional, Golden Grand, end Agri First. Somehow in 2011 their production output slightly went down on account of increased raw materiel of wheat grains and increased value of Rupiah against USD which caused Indonesian products to be less competitive. Aptindo was of opinion that the application of BMIPS/BMIP were for the sake of national interest, because I had undergone a procedure which was stipulated by regulations based on VVTO Agreements.

Aptindo stated that if the policy of trading protection was applied then:

• The state would earn state revenues from the collected tax.
• Industries which suffered loss could be helped to survive, which meant it would also save Indonesian workers being threatened by unemployment.
• It would bring positive impact on investment climate in Indonesia, due to legal assurance in doing business.

·       The Government would be consistent about protecting domestic industry from fraudulent acts of foreign countries permissible by WTO rules. Meanwhile if trading protection was not applied, UKM small business as buyer of domestic flour would suffer due to collapsed domestic industry which had been acting as their nurturers while collapsed domestic industry had its impact on joblessness.

The Government had lost lest KADI invest­ment coat without having benefits end this had its negative impact on investment climate in Indonesia as there was no legal assurance in business.

Business News - November 21, 2012