Fund examines customs problems

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.