Smuggled electronics still rampant at Glodok<\/p>\n
Dewi Santoso, The Jakarta Post, Jakarta<\/p>\n
The government's decision to lower luxury taxes last year
\nevidently has not stopped the influx of smuggled electronics
\nproducts into the country, although it has helped local producers
\nto gain ground.<\/p>\n
During a recent visit to the country's largest electronics
\ncenter in Glodok, West Jakarta, The Jakarta Post found vendors
\noffering a great number of smuggled products, including
\nhandycams, LCD-monitors, television sets and home theater
\nsystems.<\/p>\n
Many vendors in Glodok sell electronics of a similar type and
\nbrand at different prices. Smuggled products are cheaper than the
\nlegally imported ones. Unlike the legal ones, which are
\nguaranteed by the manufacturers, smuggled products are only
\nequipped with a limited warranty from shop owners.<\/p>\n
One store visited by the Post, for instance, was selling a
\nSONY-DCR-DVD101 handycam at two different prices. The smuggled
\none is priced at Rp 6.65 million (US$782.35), around Rp 1 million
\nlower than the legal one.<\/p>\n
Another electronics store offers the Pioneer HTP-230-S\/K home
\ntheater set at Rp 3.8 million (US$450) with a one-year warranty
\nfrom Pioneer. A smuggled one of a similar type is available for
\nRp 300,000 less, but with a one-year warranty from the store, not
\nfrom Pioneer.<\/p>\n
The government introduced a luxury tax break and tax reduction
\nfor selected electronics in January last year in an effort to
\ncurb smuggling, by making it less profitable, and thereby
\nboosting sales of locally produced items. This is also expected
\nto attract new investment in the country's electronics industry.<\/p>\n
The selected electronic goods that were exempted from the
\nluxury tax included televisions measuring up to 21 inches,
\nwashing machines of up to a 6-kilogram capacity, refrigerators
\nwith a maximum capacity of 180 liters and air conditioners with a
\nmaximum capacity of 1 horse power (PK).<\/p>\n
Others that benefited from the luxury tax reduction included
\n21-inch to 42-inch televisions (from 30 percent and 20 percent
\nrespectively to 10 percent), washing machines with a capacity of
\nsix kilograms to 10 kilograms (from 20 percent to 10 percent),
\nand air conditioners with a capacity of between 1 PK and 2 PK
\n(from 20 percent to 10 percent).<\/p>\n
The luxury tax break and reduction, according to Indonesian
\nElectronics Association (Gabel) chairman Lee Kang Hyun, have
\nhelped locally produced electronics to win a greater share of the
\nmarket as they are able to compete with smuggled ones.<\/p>\n
Samsung Electronics Indonesia, for example, is able to produce
\nits DVD players at only around Rp 700,000 from its several
\nplants, including one in Cikarang, Banten.<\/p>\n
It is a similar story at LG Electronics Indonesia. With its
\nplant in Cibitung, West Java, LG can manufacture and sell its DVD
\nplayers at around Rp 700,000.<\/p>\n
LG Electronics Indonesia marketing and sales manager Sung
\nKhiun said the luxury tax break had helped his company produce
\nelectronic goods here at lower costs and sell them at cheaper
\nprices.<\/p>\n
However, Sung said that smuggled LG electronics were available
\nin the domestic market when similar products were not
\nmanufactured here.<\/p>\n
No official data on smuggling was available from the customs
\nand excise department.<\/p>\n
Sung's comments were confirmed by Lee, who is also the
\nmanaging director of Samsung Electronics Indonesia, saying that
\nwas the reason Gabel proposed that the government scrap luxury
\ntax.<\/p>\n
\"The proposed scrapping is only for limited consumer
\nelectronics with certain types and specifications, though,\" said
\nLee.<\/p>\n
Gabel proposed a zero luxury tax on 29-inch to 42-inch
\ntelevisions, washing machines with a capacity of up to 10
\nkilograms, refrigerators with a capacity of between 180 liters
\nand 230 liters, and air conditioners with a capacity of over 1
\nPK.<\/p>\n
\"The zero luxury tax is needed to help reduce smuggling as it
\nwill narrow the disparity in prices between legal and smuggled
\nelectronics, and at the same time will make the local market grow
\nfaster to attract new investors,\" said Lee.<\/p>\n
Data from Gabel show that sales of electronic products were
\nestimated at Rp 30 trillion last year, compared to the market
\npotential in the country of around Rp 50 trillion, with a 20
\npercent growth annually.<\/p>\n
\"With zero luxury tax on consumer products, we can compete
\nwith smuggled products and win the competition,\" said Lee.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/smuggled-electronics-still-rampant-at-glodok-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}