Government to announce planned tarrif changes

Government to announce planned tarrif changes

Urip Hudiono and Zakki P. Hakim, The Jakarta Post, Jakarta

If all goes to plan businesspeople will find out today just
what has changed after the government officially announces
revisions to import duties on 237 products.

In a teaser announcement on Tuesday, Minister of Finance Yusuf
Anwar said the revisions to be announced on Wednesday would
include 144 cuts to subsidies and 93 increases.

"The adjustment will improve the competitiveness of our
industries and provide certainty for investors," Yusuf said
following a meeting with the Minister of Industry Andung A.
Nitimihardja.

The products on which duties would change included goods from
the agricultural, fisheries, mining, pharmaceutical and ceramic
industries, he said.

Yusuf said industries were keenly awaiting the policy.

"Moreover, it would also provide more revenues from import
duties, improve our consistency in conforming with the global
trade system, and have measures to cut down red tape and curb
smuggling," Yusuf said.

Ministry tarrifs team head Anggito Abimanyu said the move was
part of plans to slash all tariff barriers to between 5 percent
and 10 percent by 2010, except for sensitive commodities such as
rice and sugar. Their duties stand at 30 percent and 40 percent,
respectively.

The team groups officers from different government departments
in charge of coordinating tariff issues.

"The policy will also exclude tariffs which have been agreed
upon through multilateral and regional trade agreements, such as
with fellow ASEAN countries and World Trade Organization (WTO)
members," he said.

Anggito said the policy would give domestic industries a
breathing space to improve their competitiveness against imported
goods.

Import duties for some ceramic goods for example, which would
be increased by up to 20 percent next year before they were
reduced to between 5 percent and 10 percent.

Although the policy would not directly increase state
revenues, it was expected to improve the business climate and
encourage domestic industries to be more efficient.

"We expect our moves will have a multiplier effect -- raising
production capacity that will in turn boost tax income and
eventually provide more jobs," he said.

Ministry director general for customs and excise Eddy
Abdurahman said the plan would simplify the custom officials'
verification of imported goods and make it more difficult to
smuggle goods.

The business community has long complained that irregular and
unharmonized import duties had long hampered industries in the
country.

In some sectors, raw materials have higher import duties than
their end products, making local manufacturers less competitive.