'Excise target unlikely to be achieved'
'Excise target unlikely to be achieved'
The Jakarta Post, Jakarta
The Customs and Excise Office will be unable to meet this year's
excise revenue target as a result of declining cigarette sales
caused by weakening demand, Director General of Customs and
Excise Eddy Abdurrachman said on Friday.
"Cigarette output is forecasted at 186 billion cigarettes this
year, as compared to 204 billion in 2002. There will mean a loss
of around Rp 1 trillion to Rp 1.5 trillion in potential excise
revenue," Eddy told reporters.
The government had targeted a Rp 27.95 trillion (US$3.41
billion) excise revenue target for this year. Some 90 percent of
the revenue is contributed by the cigarette industry, with the
liquor industry contributing the remainder.
As of the end of June, the office had collected around Rp 11.1
trillion in excise revenue, which represents only around 40
percent of the target.
The total state budget revenue for this year is targeted at Rp
366.1 trillion, of which Rp 201.4 trillion is contributed by tax
revenue.
A shortfall in the excise revenue would force the government
to seek other funding sources, which may not be easy to find
particularly amid the current weak economic conditions.
The declining domestic cigarette sales has been largely
attributed to the weakening purchasing power of consumers
following the increase in electricity rates and fuel prices.
Eddy also said that the government's move to raise the
cigarette excise tariff during the past couple of years had
contributed to the decline in sales as cigarette producers had
passed on the higher cost to customers.
"This has contributed to the falling sales. While some smokers
used to purchase two packs (of cigarettes) a day, now they can
only afford one," Eddy said.
The office has also said it was having difficulties in
collecting excise revenue from alcoholic drinks, due to policies
in certain provinces or regencies banning the sale of such
products mainly for religious reasons.
Meanwhile, Eddy expressed optimism that the revenue target
from import duty could be achieved on the back of stronger import
activities in the second semester of this year. In the first
half, the office had collected around Rp 6 trillion, compared to
the full-year target of Rp 11.9 trillion.
Elsewhere, Eddy said that his office was preparing a policy
aimed at streamlining customs procedures in a bid to help boost
investment in the country.
Box
Excise revenue collection
1999 Rp 8.6 trillion
2000 Rp 11.3 trillion
2001 Rp 16.4 trillion
2002 Rp 20.4 trillion
2003* Rp 27.9 trillion
* target