Customs staff withhold clearance of Timor cars
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)