Customs staff withhold clearance of Timor cars
JAKARTA (JP): Director General for Customs and Excise Soehardjo said yesterday his office was still withholding the clearance of around 4,000 Timor national cars until it received a clear report on their local contents.
Soehardjo said the report on the local contents of the so- called national cars was necessary to determine the amount of taxes which should be paid by the importer, PT Timor Putra Nasional, to the government.
"State-owned surveyor PT Sucofindo is verifying the local content of the Timor cars. We have to see the report before allowing their clearance," he told reporters following a hearing with House of Representatives Commission VII on finance, trade and logistics.
Soehardjo, one of the first-echelon officials accompanying Minister of Finance Mar'ie Muhammad in the hearing, explained that Timor Putra had to submit a bank guarantee of at least 20 percent of the total value of the overall taxes imposed on the Timor cars.
He said the bank guarantees were necessary in case Timor Putra does not reach its targets for using local contents in its cars.
Timor Putra has been awarded exemption from import duties and luxury taxes on Timor cars for three years on the condition that the local contents of the cars reach 20 percent at the end of the first year of the company's operation, 40 percent at the end of the second year and 60 percent at the end of the third year.
Requirement
If the company fails to meet the local content requirement, it will then have to pay full import duties and luxury taxes.
Soehardjo, however, did not really answer the question when asked whether Timor Putra has submitted the bank guarantees for the 4,000 cars imported from Kia Motors.
"There is no problem with the bank guarantees. What we want is the report on the car's local contents," he said.
Minister of Industry and Trade Tunky Ariwibowo said recently that his office, if asked, would consider giving Timor Putra a break on bank guarantees to let the company clear its cars through the customs office.
"If they file it, we will consider it," Tunky said, adding that his office was consistent in demanding that Timor Putra submit bank guarantees to the Ministry of Finance before proceeding with the customs clearance.
Timor Putra, which will produce national cars when its production facilities are ready in 1998, is allowed to import the cars from Kia Motors without having to lose the tax facilities.
Around 4,000 of the so-called national cars have arrived here, but their deliveries to their buyers are being withheld by the customs office because the company has yet to settle all the customs requirements, including the report on local contents.
Tunky said that the fully imported "national" cars are still subject to the 20 percent local content requirement. However, the calculation is not based on the cars' local components, but on the value of Indonesian goods sold to Korea under a barter deal for the cars.
Soehardjo said that without the tax incentives, the import duty and luxury tax of built-up cars such as the Korean sedans could reach 275 percent of production costs. (hen)