Electronics manufacturer urges components duty cut

Electronics manufacturer urges components duty cut

Zakki P. Hakim, The Jakarta Post/Jakarta

The government should cut import tariffs on electronics
components so as to help improve the competitiveness of local
electronics makers in the global market, an top industry
executive said on Wednesday.

"Our products cannot compete with those from other ASEAN
countries due to Indonesia's high import duty on electronics
components," said PT LG Electronics Indonesia president Young Ha-
kim.

He said Thailand, for instance, had reduced its import duty to
5 percent on components from ASEAN member countries -- as
required under the ASEAN Free Trade Agreement -- but also from
other Asian countries like South Korea.

"We need the government to support us by reducing the import
duty," Young told reporters on the sidelines of a product launch
for a refrigerator with a built-in TV.

Indonesia's import duty on electronics components range
between 10 percent and 40 percent, he said.

"Although Indonesia is our base for manufacturing
refrigerators in the region, the cost here is still higher than
in Thailand," said Young.

LG Indonesia plans to manufacture 1.8 million refrigerators
this year -- a 20 percent increase from last year's production
volume -- of which 60 percent will be exported to Vietnam,
Malaysia, Thailand and Singapore, said Young.

Separately, Ministry of Industry and Trade's director general
of electricity, machinery, electronics and miscellaneous
industries Subagyo said the government needed to impose a higher
import duty to protect the national component industry.

However, he said in certain cases, some electronics producers
could submit a request for lower tariffs to the Ministry of
Finance, which would consult the industry ministry in making a
decision on the incentive.