Inaplas asks govt to rise import duty on polypropylene<\/p>\n
Adianto P Simamora, The Jakarta Post, Jakarta<\/p>\n
The Indonesian Olefin and Plastic Industry Association (Inaplas)
\ncalled on the government to raise the import duty on
\npolypropylene to 10 percent in order to protect local producers
\nfrom cheaper imported products.<\/p>\n
Polypropylene is a raw material for plastics. The government
\ncurrently imposes an import duty of 5 percent on the product, the
\nlowest import duty among Association of Southeast Asian Nation
\n(ASEAN) countries.<\/p>\n
"Indonesia is the most aggressive country in ASEAN in reducing
\nthe import duty on polypropylene, while our neighbors continue to
\nmaintain a high import duty to protect their industries," Didie
\nW. Soewondho, chairman of Inaplas, said on the sidelines of a
\nseminar.<\/p>\n
Last May, the government cut the import duty on polypropylene
\nto 5 percent from 10 percent, but maintained the 10 percent duty
\non polyethylene, polystyrene and polyvinyl chloride, which are
\nalso raw materials for the production of plastics.<\/p>\n
Since this decision, Didie said, cheaper imported
\npolypropylene products from ASEAN neighbors have flooded the
\nlocal market, adding to the misery of the country's ailing
\nplastic industry.<\/p>\n
"Imported polypropylene from Thailand, Malaysia and the
\nPhilippines are on the rise, as they are facing difficulty
\nentering other markets such as China and India that have imposed
\n16 percent and 40 percent import duties, respectively," Didie
\nsaid.<\/p>\n
The government of Thailand has set a 10 percent import duty on
\npolypropylene, while both Malaysia and the Philippines currently
\nimpose a 15 percent duty.<\/p>\n
"There is an oversupply of polypropylene on the international
\nmarket now, so the ASEAN polypropylene-producing countries are
\neager to take advantage of the low import duty in Indonesia,"
\nDidie said.<\/p>\n
"This is not fair and the government must respond by
\nincreasing the import duty," he said.<\/p>\n
Indonesia's plastics consumption has steadily increased over
\nthe last three years, from 1.1 million metric tons in 1999 to 1.4
\nmillion tons in 2000 and 1.6 million tons last year.<\/p>\n
The association predicted that plastics consumption would
\nreach an all-time high of 1.85 million tons this year.<\/p>\n
Indonesia imported some 225,000 tons of polypropylene in 2000,
\nabout 31.73 percent of total domestic consumption.<\/p>\n
The country is expected to import some 305,000 tons of
\npolypropylene this year.<\/p>\n
A source told The Jakarta Post that the Ministry of Finance
\nwould announce a decision next month about whether it would
\nincrease the import duty or impose a non-tariff barrier.<\/p>\n
"The government may reimpose a 10 percent import duty next
\nmonth," the source said.<\/p>\n
The association also urged the government to delay the
\nliberalization of the plastics industry under the ASEAN Free
\nTrade Area (AFTA) agreement. As part of this agreement, the
\nimport tariff of polypropylene must be reduced to below 5 percent
\nnext year.<\/p>\n
"Looking at the reality, our industry has yet to fully recover
\nfrom the economic crisis," Didie said.<\/p>\n
Didie, however, said the local plastics industry would be
\nready to implement the AFTA agreement so long as other ASEAN
\ncountries also implemented it.<\/p>\n
"Ready or not we must go on if our neighbors are committed to
\nimplementing it in 2003," Didie said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inaplas-asks-govt-to-rise-import-duty-on-polypropylene-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}