Fund examines customs problems

The Jakarta Post, Jakarta

Two experts from the International Monetary Fund are here on a ten-day special assignment to examine customs and tax problems which have been raised by industrial associations and foreign chambers of commerce.

They will meet with business leaders and executives of various industrial associations to learn more about problems in the customs and tax services as part of an overall review of Indonesia's economic reform programs, informed sources said over the weekend.

There have been increasing complaints from businesses about unfair competition from foreign goods, which enter the country through smuggling or under-invoicing practices. They blame the problem mainly on what they consider the technical incompetence and corruption by customs officials.

" The fourth reform agreement with the IMF has stipulated a comprehensive reform program in the tax sector, including the establishment of special rules and administrative offices for large taxpayers, but the government has yet to initiate new measures in the customs service," the sources added.

Textile, footwear and electronic industrial associations and business leaders including Sofjan Wanandi of the Indonesian National Economic Recovery Committee, and James Castle, president of the American Chamber of Commerce, have urged the government to reintroduce a pre-shipment inspection system for imports.

The Japan Club, the association of Japanese businesspeople in Indonesia, has also set up two working committees in charge of customs and tax problems.

Then president Soeharto stripped the corruption-infested customs service of its inspection authority and introduced a pre- shipment inspection system in 1985 until 1997 to facilitate the smoother flow of imports and safeguard duty and tax revenues.