Kadin asks for transition period of customs law
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry (Kadin) has supported the new customs law but asked for a transition period of three to six months before it is fully enforced.
Kadin's Vice President Iman Taufik told The Jakarta Post the chamber highly appreciated the good intention and determination of the Customs and Excise Director General, Soehardjo, to implement the law on April 1 as scheduled.
"But is the customs service really prepared to fully enforce the law with its on-arrival inspection and post-entry audit mechanism?" Iman asked.
According to Iman, it is crucial Indonesian exporters beef up their weakening competitive edge.
"We would be finished if import flows were delayed because of our high ambitions to fully enforce the law in April," he said, adding that smooth import flows are crucial for the manufacturing industry.
The new customs law will introduce selective on-arrival inspection of imports, post-entry audit of import documents and a self-assessment system for calculating import duties.
The law will also implement the GATT code of valuating imports for customs purposes on the basis of transaction values.
European, American and South Korean businessmen have also expressed concern over the new system of customs inspection which would replace the current preshipment inspection which is conducted by state-owned PT Surveyor Indonesia.
The businessmen have also been apprehensive of the competence and mental attitude of customs officials in exercising their new responsibility.
They said they did not see any improvements in the circumstances and conditions which had forced the Indonesian government in mid-1985 to strip the corruption-infested customs of its import inspection and introduce the preshipment inspection system at points of loading.
Iman welcomed Soehardjo's efforts to introduce an electronic data interchange (EDI) system to process documents as it would minimize physical contact between businessmen and customs officials.
He agreed that minimizing physical contact could reduce opportunities for collusion between businessmen and customs officers.
"But we are not sure yet whether the customs service is fully prepared to run the EDI system," the chamber vice president added.
He said the customs service had not yet trained enough operators to run the EDI system even though the start-up date for its implementation was only a few weeks away.
"We therefore have suggested that importers be given a transition period of between three to six months during which they have the option of either using the current preshipment inspection system or the new one (on-arrival inspection and post- audit) under the customs law," he said.
Such a transition period, Iman added, is essential as any delay in the release of imports could wipe out the small competitive advantage still owned by exporters of industrial goods.
"We should not talk about the global market. Even within the ASEAN region, our competitive edge is very weak," Iman said.
He expressed fear that past practices would recur such as before June, 1985 when the customs service was stripped of its import inspection authority.
Businessmen, Iman added, had often been forced to bribe customs officials to get fast clearance of their imports.
"The problem is, though, we cannot account for such spending as operational or production costs as we cannot produce the legal receipts," he said.
Businessmen often have to mark up the prices of their imported materials or other expenditures, otherwise such illegal spending would have to be included in taxable incomes, Iman added. (rid/vin)