Asrim against excise taxes on soft drinks<\/p>\n
JAKARTA (JP): The Association of Indonesian Soft Drink
\nProducers (Asrim) opposed on Thursday the government's plan to
\nintroduce excise taxes on soft drinks.<\/p>\n
The association's chairman Mugijanto said that imposing excise
\ntaxes on \"price-sensitive\" products such as beverages would be
\nconterproductive.<\/p>\n
Collecting a 25 percent excise tax from the sales of beverages
\ncould result in a rise in prices of at least 30 percent, he said,
\nadding that the higher pries could cut total sales of soft drinks
\nin the country by about 35.7 percent.<\/p>\n
\"It means any plans to impose excise taxes on soft drink
\nproducts would be conterproductive for the government because it
\nwould drain out its revenue base,\" he told a media briefing.<\/p>\n
Mugijanto said the calculated 30 percent increase in prices
\ntook into account the government's decision to raise fuel and
\nelectricity prices beginning next month.<\/p>\n
The estimated 35.7 percent decline in beverage sales would
\ntranslate to a loss of revenue by about Rp 297 billion (US$39.8
\nmillion) of the industry's estimated total sales in 2001, he
\nsaid, quoting data issued by the Institute for Economic and
\nSocial Research (LPEM) of the University of Indonesia.<\/p>\n
He further warned that the policy would ultimately result in
\nmass layoffs, amounting to some 7,000 people within the beverage
\nindustry and over 30,000 people in related industries.<\/p>\n
\"This figure doesn't include street vendors selling our
\nproducts,\" he said.<\/p>\n
The government plans to impose a 25 percent excise tax on
\nbeverages as of April 1, but has delayed the move until next year
\nfollowing the association's protest.<\/p>\n
The association has said the plan to impose excise taxes on
\nsoft drinks should be dropped for ever given its negative impact
\non the sources of state revenue.<\/p>\n
The association's 23 members include producers of brands like
\nCoca Cola, Pepsi, Teh Sosro, and mineral water Aqua.<\/p>\n
According to Mugijanto, the government should not treat soft
\ndrinks in the same way as alcoholic drinks or luxury goods, which
\nwere subject to excise taxes.<\/p>\n
In addition, excise taxes would impede the industry's growth,
\nciting that the nation's consumption of soft drinks was way below
\nthat of neighboring countries like Malaysia and Thailand, he
\nsaid.<\/p>\n
He expected a double digit growth in the industry over the
\nnext five to 10 years if the government did not burden the
\nindustry with more taxes.<\/p>\n
Besides from postponing the imposition of excise tax on
\nbeverages, The Directorate General of Custom and Excise also
\ndelayed excise taxes on the cement and tire industries.<\/p>\n
Opposition from the industries' associations forced the
\ngovernment to reconsider its decision. (bkm\/07)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asrim-against-excise-taxes-on-soft-drinks-1447893297",
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