Government mulls lifting duties on sugar-based products: Rini

Mochammad N. Kurniawan, The Jakarta Post, Jakarta

Minister of Trade and Industry Rini M.S. Soewandi said on Wednesday that the government was considering raising import duties on sugar-based products, a policy that may give rise to international criticism as it goes against the trade liberalization agenda.

Rini said that the policy was needed to help protect local industry against imported products.

"We are now discussing the plan," she told reporters at a press conference.

Rini said that her office was cooperating with the Ministry of Agriculture and the Ministry of Finance in discussing the new plan.

She declined to provide details.

The government currently imposes import duties of between zero percent and 5 percent on sugar-based products.

But import duty on raw sugar and white sugar, raw materials for the local confectionery industry, are set at 20 percent and 25 percent respectively.

Many local confectioners have had to import sugar because domestic sugar production has not been sufficient to meet their needs.

According to one estimate, Indonesia's sugar imports this year are expected to reach between 1.2 million tons and 1.5 million tons, compared to 1.2 million tons last year.

Separately, Thomas Dharmawan, executive director of the Indonesian Food and Beverages Association (Gapmmi), welcomed the planned hike in import duties on sugar-based products, saying that the local industry should be protected so as to create more jobs.

But he said the government must be ready to accept criticism from other countries as such a move would be against the policies of the World Trade Organization as well as the ASEAN Free Trade Area agenda.

Therefore, he proposed that the government impose other forms of taxes which were allowed worldwide under the so-called "safeguard measures."

Thomas pointed out as an example that the French government had applied an 8.5 percent import duty on sugar-based products, plus a tax of US$0.50 per kilogram of imported sugar.

"If the French can, we can too," he told the Jakarta Post.