Car assemblers complain of unfair competition
JAKARTA (JP): Car assemblers have been complaining about unfair competition from luxury automobiles imported in completely-built up (CBU) form as the base prices used for customs and tax valuation are often much lower than comparable prices overseas.
Executives of assembling companies and car dealers said on Thursday that understated import prices caused not only unfair competition but also losses in state revenues.
They claim not to have any objection to the car import liberalization policy allowing importation of CBU automobiles but insisted that the government ensure fair competition.
Before liberalizing the policy, automobiles could be imported only by sole agents and only in completely-knocked-down kits.
Citing an example, a car dealer said a general importer recently quoted the C&F (cost and freight) import price of a Mercedes Benz ML320 Offroader at S$20.706 (US$12,072).
"This price is much lower than the $31,486 price reported by Mercedes sole agent German Motor Mfg and the $23,304 base price set by the customs and excise tax directorate general for customs and tax valuation," the dealer added.
He said if the import duty (45 percent), luxury sales tax (50 percent) and value added tax (10 percent) were applied on the transaction price (US$12,072), and not on the factory price ($31,486) as quoted by German Motor, the government would lose $25,627 (Rp 192.2 million) per unit.
"Even if the customs service insisted on using its reference price ($23,304) for customs and tax valuation, the state would still lose $17,540 (Rp 131.5 million) per unit," he added.
He said such under-valuation also would pose unfair competition to locally-assembled sedans by reducing the price differences between luxury cars and compact sedans.
Bambang Trisulo, chairman of the Association of Automobile Industries, confirmed that his organization had received complaints from a number of assemblers about what they saw as unhealthy competition.
"We will soon meet with the customs and excise duty directorate general and the trade and industry ministry to discuss the base prices quoted for customs and tax valuation," Bambang said.
Separately, Noegardjito said that customs and tax valuation for imported cars should be based on the list of base prices set by the customs and excise tax directorate general and not on the transaction prices as reported by importers.
"The list of base prices was drawn to be used as reference prices if customs officers doubted the import prices quoted by importers," Noegardjito told Business Indonesia" .
However, assemblers contend that the base prices set by the customs and excise tax director general, Permana Agung, in his directive of Jan.27, 2000 were, for many car makes, much lower than those quoted by the sole agent or comparable C&F import prices in other countries.
Another dealer said a general importer quoted the C&F import price of a Range Rover 4.6 HSE at NZ$45,210 (US$21,836), as against US$23,466 reported by sole agent Java Motor, and $32,572 set by the customs service and $67,300 in the U.S.
A general importer reported the C&F import price of a BMW Z3M at $11,080, as against $15,560 quoted by sole agent Tjahya Sakti Motor, $16,328 set by the customs service and $36,900 in the U.S.
The customs service's list of base prices put the C&F import price of Toyota Camry 3.0 at $10,451, compared to $24,068 in the U.S.
Customs and Excise Tax Director General Permana, however, argued that importers had little chance of underpaying import duty because his office could detect under-invoicing practices in post-audit inspections.
He said the import prices of some goods could be slightly lower than the customs service's base prices because importers sometimes could get big discounts for big-volume purchases.
"But obviously, we cannot accept large differences between the transaction prices and our base prices," he added.
He did not explain why the customs service's base prices are lower than C&F prices of comparable cars published in the U.S.