Imposing export tax on paper not essential: Mar'ie

JAKARTA (JP): Minister of Finance Mar'ie Muhammad hinted yesterday that he would not introduce a tax instrument to curb exports of paper in spite of the current shortage of supply.

Speaking at a hearing with the Finance and Trade Commission of the House of Representatives, Mar'ie said that Indonesian paper producers could lose their markets if they are required to pay export taxes.

"It is not an easy job to get back the market, which has been filled by exporters from other countries," he said in his response to House members' question over the possibility of imposing a tax on paper exports.

House members said that the introduction of an export tax would be an effective solution in dealing with the paper shortage in Indonesia.

The minister said that the government's macro policy is to gradually reduce all tariff and non-tariff barriers in order to give fair treatments to all business players.

He acknowledged that the government still imposed taxes on exports of a number of commodities, such as crude palm oil, to protect local cooking oil producers and consumers.

"Such a tax measure is, however, only temporary and is imposed only on an emergency situation," he said of the reason why there is an inconsistency in the government's export tax policy.

Mar'ie said that the government also gives similar taxation treatment to imports and is committed that it will not introduce a new import tax in the future.

"However, if there is evidence that other countries carry out a dumping practice towards Indonesia, such a tax measure is a must to protect the country's economy," he said of the possibility of imposing import taxes on certain commodities.

He explained that the gradual reduction of tariff barriers is not only essential in following the trends of trade globalization but is also important in minimizing the monopolistic practices of some business groups.(hen)