Luxury tax affects PC sales: Apkomindo

Luxury tax affects PC sales: Apkomindo

JAKARTA (JP): The imposition of the 20 percent luxury tax in
January has caused a significant drop in sales of personal
computers during the last two months, according to PC
distributors.

Hidayat Tjokroadjojo, president of the Indonesia Computer
Dealers Association (Apkomindo), said here on Tuesday that the
downward trend in PC sales might continue with Microsoft recently
launching a more aggressive campaign against piracy.

He estimated that total PC sales would fall by at least 20
percent to 320,000 units in 2001, down from 400,000 units sold
last year, because for many individual buyers the price of PCs is
already too high.

According to Hidayat, the imposition of the luxury tax alone
had caused an immediate 20 percent increase in PC prices. Hidayat
believes that Microsoft's campaign against piracy would also
force distributors to use original software programs which would
in turn cause another increase.

"Now many consumers have to think twice before buying new PC,"
he told The Jakarta Post.

A new luxury tax ranging between 10 and 75 percent was imposed
last month on 41 groups of items as part of the government's
effort to meet the state income target this year.

The new classifications included a 20 percent tax on desktop,
laptop and other related computer products. Prior to the luxury
tax, computer hardware was only subject to the 10 percent value
added tax.

"Computers should not be considered luxury goods because they
are mainly used as a tool to benefit from information technology
and to gather information from all over the world," he said.

Separately, a senior official at the office of the director
general of tax said that the government was considering the
possibility of reviewing the list of products which are subject
to luxury tax payments.

"We welcome people discussing the issue with us ... we hope to
finalize the new list within the next six months," director of
the tax counseling department Nono Hanafi said.

In addition to the higher tax payment, the sales of personal
computers may suffer further setbacks following Microsoft's
clampdown on software piracy.

Microsoft Corp. filed lawsuits last week against five computer
dealers in Jakarta for copying and distributing its software
illegally in Indonesia.

According to the American software company approximately 85
percent of its software sold in Indonesia last year was pirated.
The company fears that the piracy rate could increase to 92
percent this year. (05)