City to suffer beef shortage during Idul Fitri
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.