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.