60% of import invoices underpriced

JAKARTA (JP): A high proportion of import invoices are underpriced, due to the lack of control from the customs and excise authority, according to the Indonesian Importers Association (Ginsi).

The association's chairman Amirudin Saud said that underpricing had attributed to the significant drop in the government's receipts from import duties.

"About 60 percent of the country's import goods are underpriced," he told reporters at a media briefing.

According to him, last year's realized import excise amounted only Rp 6.4 trillion (US$570 million), only about a half of the its existing potential.

Underpricing of the import invoices was rampant due to weaknesses in the post-shipment inspections carried out by the customs and excise authority, he added.

In 1997, the customs office operated the post-shipment inspection system for imports, after regaining its inspection rights that were scrapped by the government in 1985.

Between 1985 and 1997, the inspection rights were given to Geneva-based Societe Generale de Surveillance (SGS), which conducted pre-shipment inspections of imports.

Amirudin said that underpricing could not be stopped as long as the government continued to implement post-shipment inspection.

"The government should re-impose pre-shipment inspection to solve the problem", he added.

He also said that if the government implemented pre-shipment inspections, this year's revenue from excise duties could exceed its target of Rp 27 trillion.

"The government revenues from the import duties could reach about Rp 35 trillion this year," he said.

He added that pre-shipment inspection would also help attract foreign investors to invest their funds in the country, as it would give them more certainty in their business activities.

"The system was faster and more efficient when it was operated by SGS," he said, but he did not elaborate.(05)