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
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