'Beef shortage might hit city'

'Beef shortage might hit city'

Ahmad Junaidi, The Jakarta Post, Jakarta

City officials predicted on Thursday that there would be a
shortage of beef during the Idul Fitri festivities and that its
price would sharply increase due to the central government's
decision to apply value added tax (VAT) to imported meat.

Prabowo Soenirman, president of the city-owned slaughter house
PD Dharma Jaya, estimated the price of beef would increase to Rp
55,000 (US$5.50) from the current Rp 35,000 a kilogram.

"The price increase is also caused by the application of the
10 percent tax on imported meat," Prabowo said before a hearing
of the City Council Commission B for economic affairs.

He revealed that, currently, two meat importers' associations
with stocks of 60,000 head of cattle could not sell their stock
because they had to pay the VAT.

He said the decision on VAT, which was issued in June this
year, obliged meat importers to pay the tax on meat imported
since January.

"We have asked the government not to apply the VAT from
January because importers would suffer losses. But until now
there has been no decision on the matter," he said in the
hearing, which was also attended by deputy governor for economic
affairs Fauzie Alvi Yasin.

Prabowo said the importers already had to pay an import tax of
7.5 percent.

The shortage of beef was also caused by the fact that,
beginning on Dec. 10, importers would be unable to purchase
cattle and frozen meats from Australia due to the Christmas and
New Year holidays.

Commission B chairman Syarief Zulkarnaen urged the government
not to apply the VAT to meat that had been imported since
January.

"It's an irrational decision. At least the decision could be
applied starting in June," Syarief of the United Development
Party remarked.

However, he said he could understand the application of VAT on
imported meat as part of the government's efforts to cover the
State Budget deficit next year.

Dharma Jaya currently has stocks of 2,000 cattle and 370 tons
of frozen meat for Idul Fitri and Christmas celebrations.

Jakarta residents consume about 150 tons of beef a day and it
is predicted that during the three days before the Muslim holiday
period some 1,500 tons of beef will be bought by residents.

In the hearing, the city-owned market operator PD Pasar Jaya
president Syahrir Tanjung admitted that it was unlikely that the
government would change its policy on the imported meat tax.

"The government thinks that meat is not a primary need. We
could eat fish or tempeh (fermented soybean) instead of meat,"
said Syahrir, who is also a member of the government team for the
imported meat tax.