Legislator calls on government to get tough on car smuggling

Fadli, Batam

An outspoken legislator of the Batam Council has called on the central government to take action against the unchecked smuggling of used cars from Singapore and Malaysia, which has contributed to traffic congestion on the islet.

Deputy chairman of the Batam municipal council Ahars Sulaiman said National Police chief Gen. Da'i Bachtiar, finance minister Budiono and Attorney General AR Rachman should take measures against subordinates using smuggled cars on Batam.

He pointed out that more than 3,000 used cars illegally imported from neighboring countries Singapore and Malaysia were being driven on Batam without fear of persecution.

"Aside from the illegal cars, government officials of relevant departments are involved in the smuggling and trade of used cars in collusion with local dealers. This is why thousands of smuggled cars are operating freely," he said.

Private vehicles are one of three commodities subject to value-added tax (VAT) under Government Regulation No. 3/2003. The other two are liquor and cigarettes.

Used cars from Singapore and Malaysia have flooded Riau, including Batam and Tanjung Pinang, over the last five years because of their relatively cheap price and good condition. An automatic 1997 Honda Civic is offered for between Rp 15 million and Rp 20 million. In Jakarta, a 1997 Civic sells for Rp 80 million.

Ahars said it looked unlikely that Batam Mayor Nyat Kadir would stop the smuggling, because in addition to law enforcers playing a role in the smuggling, the administration had planned to legalize more than 400 smuggled cars on streets of Batam.

He said the council would oppose the administration's plan to legalize the illegal cars.

"The main problem is not that owners of the illegal cars don't pay taxes to the local administration, but that the island has a limited road capacity. Traffic congestion has become a daily occurrence on Batam's main roads because the number of cars, trucks and motorcycles far exceed their capacity. Traffic will only get worse unless the inflow of cars is regulated," he said.

Ahar suggested the smuggled cars be seized and turned into scrap, or transported to other, underpopulated islands in the province.

Amhar Ismail, secretary of the Joint Task Force Against Smuggled Cars (TPKB), confirmed that the administration was seeking approval from the legislative council for its plan to legalize all smuggled cars recorded by the TPKB.

"With the legalization, owners (of the smuggled cars) will be obliged to pay import tax and excise of Rp 5 million (US$555) and the annual vehicle tax," he said. He agreed with Ahar that the smuggling of used cars had become widespread because of increasing demand and the low price of the vehicles.

The planned legalization of the illegal cars is based on Ministerial Decree No. 584/2003, which stipulates that any VAT- applicable commodity that was imported before the issuance of the government regulation on VAT are still required to fulfill appropriate tax and excise regulations.

Amhar conceded that the joint task force comprising local police, Batam Prosecutors' Office and the industry and trade office had found it difficult to keep illegal cars off the streets, because the car owners had the backing of fraudulent police and military personnel.

"The task force has confiscated numerous illegal cars and handed over them to local police for further processing, but the cars are back on the streets only a few days later, because the owners have paid off local police," he said.