2002 customs earnings hard to meet: Official

JAKARTA (JP): The higher target for the 2002 customs receipts will be difficult to achieve as more and more import tariffs will be cut to comply with the ASEAN Free Trade Area (AFTA), a senior official says.

Director General of Customs and Excise Permana Agung said on Wednesday that one consequence of Indonesia's participation in AFTA was that many of its import duties were set to be reduced to between zero percent and 5 percent by next year.

"So even if our import volume remains at the current level, the reduced tariffs will mean a lower income for us," he said on the sidelines of a media workshop here.

On top of that, the volume of imports is likely to decline next year on account of the global economic downturn, which will it extremely difficult to reach the target, Permana said.

In its 2002 draft state budget, the government expects to receive Rp 12.25 trillion (about US$1.3 billion) from import duties, 18 percent higher than the Rp 10.4 trillion targeted for this year.

The AFTA agreement requires Indonesia to remove import duties on most of its tariff lines by 2002, the accelerated deadline for AFTA.

Each country of the original Association of Southeast Asian Nations (ASEAN) grouping -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- was to achieve a minimum of 90 percent of their committed tariff lines in the zero percent to 5 percent tariff range by 2001, and all items by 2002.

According to data from the ASEAN Secretariat, Indonesia had committed 7,190 tariff lines to be reduced to between zero and 5 percent import duty.

Some 89.7 percent of the tariff lines is expected to be slapped with zero import duty this year, about 20 tariff lines short of the target, and a total of 99.08 percent is expected to be reached in 2003.

Some of the products set for zero import duty include live animals, plastics, footwear, vehicles, processed food and pulp and paper.

On the same occasion, Permana also said that the government would try to implement a new system for cigarette excise next year.

He said that under the new system, the government would no longer determine the price per cigarette but would leave it to the market.

"The new system will be nearer to a free market mechanism," Permana said, adding that he had presented the concept to the Federation of Indonesian Cigarette Manufacturers (Gappri) and that some members had voiced approval.

He did not provide details.

There has been speculation in the market that cigarette excise will be raised again in November. It was last raised in April.

The government expects to receive Rp 22.3 trillion in excise for 2002, compared to this year's target of Rp 17.6 trillion. (tnt)