Matsushita asks Indonesia to cut sales tax on luxury goods
Matsushita asks Indonesia to cut sales tax on luxury goods
By Sylvia Gratia M. Nirang
TOKYO (JP): Japan's electronic industry giant Matsushita
Electric Industrial Co., asked the Indonesian government on
Monday to lower sales taxes on luxury goods imposed on color TV
sets and refrigerators.
Matsushita's Executive Director Morihiro Sato said the sales
tax imposed on TV sets and refrigerators were now inappropriate
as the two electronic appliances were no longer considered luxury
goods in the country.
"The two products have led the Indonesian market in the past
five years. They are very popular products for most Indonesians.
So we think that imposing a 20 percent luxury tax will only
damage the local sales," Sato said in a meeting with Indonesian
Minister of Industry and Trade Rahardi Ramelan here.
Sato said Japanese electronic makers were no longer producing
the 14-inch color televisions because Indonesians preferred to
purchase ones with bigger screens.
The government currently imposes a 20 percent luxury tax on
televisions with screens larger than 14 inches and refrigerators
with a capacity of up to 200 liters.
Sato also said that Matsushita booked a sharp decline in its
sales in Indonesia's market last year due to the country's worst
ever crisis.
Last year Matsushita's eight Indonesian affiliates recorded 9
billion yen (US$75 million) in domestic sales. They booked 54.6
billion yen ($500 million) in export sales last year, an increase
of about 10 percent compared to the export value in 1997.
"Matsushita's Indonesian affiliates still survive amid the
sluggish domestic sales because 86 percent of their products are
exported," Sato said.
Sato said that his company believes the prospect of the
electronic industry in Indonesia would remain bullish despite the
country's prolonged economic crisis.
"We still see Indonesia as the most important market to us,
given its huge population which is very adaptive to new
electronic products," he said.
Sato said that instead of pulling its investment out,
Matsushita planned to expand its business in Indonesia.
"This year we plan to invest 36 trillion yen or about $3
billion to expand the operation of our existing plants in
Indonesia," he said without elaborating further.
Sato said, Matsushita would use the production slowdown to
improve the technology and human resources of their local
partners by providing extensive training for their workers.
"Right now, despite encouraging domestic sales, the Indonesian
government should also develop electronic supporting industries,
which produce raw materials and components, in order to boost
exports," he said.
He added that currently the Indonesian electronic industries
were heavily dependent on imported raw materials and components,
making it hard to get optimal benefit from big exports.
Matsushita's Indonesian affiliates produce audio, television,
home appliances, video-recorders, speakers, semiconductors,
batteries and others under the brand National/Panasonic.
Rahardi, who is leading a trade mission to Japan, said that
Indonesia expected to generate $20 billion in export value from
electronic goods in the next 10 years from the estimated $4
billion this year.
"But we badly need your help to reach this target. So please
continue investing your money in Indonesia. From the government's
side, we pledge to create a more conducive market for the
electronic industry," he said.
Rahardi said the government was currently preparing a new
electronic policy to attract investors and to create a more
competitive market.
He said that the country's exports of electronic goods
declined by 12 percent to $2.9 billion last year compared to its
figure in 1997.