Thu, 16 Jul 2009
The Customs and Excise Office has urged the Trade Ministry to allow more companies to import alcoholic beverages, instead of just one currently, to help curb smuggling.

Today the import of alcoholic drinks is monopolized by state-owned company PT Sarinah.

Anwar Suprijadi, Finance Ministry’s customs and excise director general, said Tuesday the mono-poly had caused unhealthy competition and discouraged smuggling activities.

“Nowadays, Sarinah is the only company authorized to import alcoholic beverages.

“Others however have been trying to violate the regulation to get benefit for themselves.

“We have suggested that the trade ministry select a new alcoholic drinks importer to compete with [Sarinah].”

He cited as an example the office’s efforts in foiling five attempts to smuggle liquor into the country through Jakarta in the first half of this year, preventing state losses of more than Rp 6.5 billion (US$660,000) in tax revenue.

The most recent case of liquor smuggling from South Korea cost Rp 750 billion in state losses.
Anwar’s proposal is the latest calls for the government change its policy on the imports of alcoholic beverages.

Recently a Centre for Strategic and International Studies (CSIS) study suggested that the government cut the tax on alcoholic drinks and change the system, saying it has neither discouraged consumption nor maximized revenue, but instead fostered a thriving black market.

The think-thank said the current alcohol tax of as high as 500 percent, which was far higher than the global standard, had failed to bring about the optimal outcome of generating revenue and protecting public health.

It was reported during the alcohol shortage a few months ago, hospitality industry such as restaurants, hotels, and bars were forced to buy alcohol from illegal markets, even though the price was high, almost three times the usual price.

During the shortage, Johnny Walker whisky, for instance, was tagged at Rp 350,000 (US$30) on the black market, far higher than the normal price of Rp 120,000.

Under normal conditions, when there is no shortage in legal alcohol, prices on the black market are much lower, because they do not include taxes, duties or customs.

Imported alcohol is subject to duty fees, value added taxes of 10 percent, luxury good taxes of 40 percent and customs fees according to alcoholic content.

Customs fees for alcohol content vary from Rp 2,500 per liter for drinks with less than 1 percent alcohol to Rp 26,000 per liter for liquors containing more than 20 percent alcohol for domestically manufactured drinks.

Imported beverages can be taxed up to Rp 50,000 per liter if they have an alcohol content of more than 20 percent.

Reports have said that up to 60 percent of alcohol consumption in Indonesia is supplied by the black market.

It is estimated that there are 400,000 bottles of illegally imported liquor each year - half the amount of the legal distribution.

The customs office estimates that the loss caused by smuggling is around Rp 1.5 trillion. (naf)



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