Customs boosts inspection efforts to curb smuggling

Customs boosts inspection efforts to curb smuggling

The Jakarta Post, Jakarta

After being criticized for years for its failure to curb
smuggling and even colluding with smugglers, the directorate of
customs and excise has announced several programs to show its
seriousness in combating the crime.

As part of these programs, the agency has intensified checks
on imported goods.

"We are now intensifying inspections on imported goods at
seaports. Our main purpose is to minimize smuggling and
underinvoicing," Eddy Abdurachman, who was installed as the
director general of customs and excise last month, told The
Jakarta Post on Monday.

He did not elaborate on the intensive checks, but the impact
of the program has been felt by at least the cell phone market.

The price of cell phones has reportedly been on the rise due
to a lack of supply in the local market.

Suppliers have blamed this on intensive inspections by the
customs office, which have made it more difficult for importers
to obtain clearance for imported cell phones.

However, Eddy argued that the customs office had no intention
of curbing import flows.

"What we are doing is simply boosting inspections," he said.

The agency has granted the facility to only 10 firms of good
repute to clear their imported goods faster and more cheaply
through customs at Tanjung Priok seaport.

The ten companies are: PT Toyota Astra Motor, PT Astra
Daihatsu Motor, PT General Motor Indonesia, PT Indomobil Suzuki
International, PT Astra Nissan Indonesia, PT Denso Indonesian
Corporation, PT National Gobel, PT Sanyo Industries Indonesia, PT
Sharp Yasonta Indonesia and PT LG Electronic Indonesia.

The customs office has long been criticized for its weak
performance and failure to curb both smuggling and
underinvoicing, which have resulted in a huge influx of imported
electronic goods and textiles.

Many local producers have gone bankrupt or are facing
bankruptcy for failing to compete with much cheaper imported
products.

As part of efforts to curb smuggling, the customs office has
also launched a program to register all importers and audit their
performance to identify which companies have a tendency to engage
in smuggling and underinvocing.

Many importers listed on the directory provided by the
Ministry of Industry and Trade have reportedly used fake
addresses to obtain licenses from the ministry.

Besides, the office, together with the police and the
directorate of tax, has carried out operations to investigate
dozens of textile and electronics firms suspected of smuggling,
based on the list provided by the Crisis Center.

The center was created by Minister of Industry and Trade Rini
Soewandi in the middle of the year to cope with problems
confronting the country's businesses. The center has identified
smuggling as the greatest challenge now facing the local
manufacturing sector.

Meanwhile, as part of efforts to curb smuggling, Minister of
Finance Boediono said on Monday that he was considering cutting
luxury taxes (PPnBm) on electronic goods.

"We hope the move can help narrow the price margin between
imported and locally made products and hence curb the smuggling
of electronic goods," Boediono said.

The government currently imposes luxury tax on electronic
goods ranging from 10 percent to 70 percent.

While local electronics producers have to pay the taxes,
illegally imported products can be sold more cheaply, as no such
taxes are paid.