Sat, 17 May 2008
Aditya Suharmoko, The Jakarta Post, Jakarta

The Finance Ministry has prematurely reduced import duties on raw materials to help domestic industries compete with rival products from overseas.

The Ministry's head of fiscal policy (BKF), Anggito Abimanyu, said Thursday the reduction applied to duties on 14 raw materials used in the manufacturing of film and camera products. The raw materials are currently subject to import duties of between 10 and 40 percent.

Industries that use the materials are facing tough competition from lower-cost, higher-quality imports.

"The import duties on the materials have been reduced by between 0 percent and 5 percent," Anggito told a press conference Thursday.

The government initially planned to reduce the import duties in 2009.

Anggito also said the ministry adjusted import taxes on 295 products, in line with the government's so-called 2008 harmonization program, which is designed to boost domestic industry competitiveness, ensure a healthy business climate and prevent smuggling.

"We expect the price of our local end-products will be cheaper after the import duty reduction," he said.

Local businesses have often complained they are unable to compete with low-cost imported products, mostly from China, that are flooding the domestic market.

Under existing regulations, the government slaps its highest import duty -- of 50 percent -- on luxury cars, including sports cars, sport utility vehicle (SUV) and station wagons with engine capacities above 1.8 liters; as well as on ambulances, hearses and prison vans, whereas chemical substances are duty free.



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