JP\/13\/FISKAL<\/p>\n
Component duty cuts worry local suppliers<\/p>\n
Zakki P. Hakim
\nThe Jakarta Post\/Jakarta<\/p>\n
Minister of Industry Andung A. Nitimihardja announced on Monday
\nsignificant import duty cuts on parts and components for public
\ntransportation vehicles in a move he says will reduce the impact
\nof the recent fuel price hikes.<\/p>\n
However, local industry players and a legislator saw the move
\nas a setback that could hamper the country's automotive and
\ncomponents sectors.<\/p>\n
Legislator Zulkieflimansyah said the move contradicted the
\ngovernment's own strategic plan for developing Indonesian
\nindustry.<\/p>\n
"The move makes it inevitable that our industries will become
\nmired in a long-term dependency on foreign countries," said the
\nmember of the House of Representatives' trade and industry
\ncommission.<\/p>\n
Ahmad Safiun, chairman of the Federation of Indonesian Metal
\nand Machine Industry Associations (GAMMA), said the government
\nshould have provided additional incentives to local manufacturers
\nto produce parts and components rather than encouraging imports.<\/p>\n
"The government could have provided tax cuts and other
\nincentives to local parts makers," he told reporters after the
\nannouncement.<\/p>\n
Following the recent 30 percent increase in fuel prices,
\npublic transportation operators responded by increasing their
\nfares. The government said that providing tax relief for
\ntransportation operators importing parts and new buses would
\nprevent excessive transportation fare hikes.<\/p>\n
"Encouraging operators to buy imported parts and buses has
\nnothing to do with mitigating the effects of the fuel price
\nrises," Safiun said.<\/p>\n
Moreover, he said, the government could have encouraged parts
\nimporters to avail of the existing import tax cut facility
\nprovided for under the ASEAN Free Trade Agreement.<\/p>\n
The facility, known as the Common Effective Preferential
\nTariff (CEPT) scheme, allows members of the Association of
\nSoutheast Asian Nations to import goods, including automotive
\nparts, from fellow members with import duties of between zero and
\n5 percent.<\/p>\n
Anggito Abimanyu, head of the Ministry of Finance body
\nresponsible for tariffs, said the import duty cuts were needed as
\nthe imports were expected to come from China, and would thus be
\noutside the CEPT scheme.<\/p>\n
Andung defended the move, saying the import duty cuts were
\ntemporary and based on a quota system, and so would not hurt
\nlocal industry.<\/p>\n
"We will restore the import tariffs after 12 months, or sooner
\ndepending on when the quotas have been met," he said, adding that
\nthe new tariffs went into effect on March 10.<\/p>\n
The government has cut import duty on clutch assemblies, timing
\nbelts, wheel bearings, transmission assemblies and engine blocks
\nfor public transportation vehicles to zero from a previous range
\nof between 0 and 15 percent.<\/p>\n
Chassis fitted with engines for buses have had their import duty cut
\nto 5 percent from 40 percent, while completely knocked down buses
\nand commercial vehicles have had their import taxes cut to 5
\npercent from 25 percent.<\/p>\n
The government has also slashed import duties on completely
\nbuilt up buses to 5 percent from 40 percent. But the import quota
\nis restricted to 1,150 units.<\/p>\n
The secretary-general of the Indonesian Association of
\nAutomotive Assemblers (Askarindo), Soeseno, demanded that the
\ngovernment stick to its decision to apply the duty cuts for a
\nlimited period and to impose import quotas.<\/p>\n
"Past experience shows that once the door to imports is
\nopened, it stays that way, even after the regulations say it has
\nbeen closed," said Soeseno, whose association now has only around
\n60 members compared to 300 in the early 1990s.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jp13fiskal-1447899208",
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