Ministry urged to cut luxury tax on daily needy

JAKARTA (JP): The Ministry of Industry and Trade has urged the Ministry of Finance to reduce or abolish altogether luxury taxes imposed on products that are no longer considered luxuries.

Director General of Metal, Machineries, Electronics and Various Industries Agus Tjahajana said on Friday that luxury taxes currently imposed on several electronic products and various other goods were no longer suitable in the current economy condition.

"We urge the finance ministry to remove or at least to cut the luxury taxes imposed on several products, which in the current condition are no longer considered luxury goods," Agus said.

"For example, bottled drink is no longer considered a luxury good because it has become a daily need nowadays. So it should be exempt from luxury taxes."

Agus said the Industry and Trade Research and Development Agency was studying the amount of luxury tax to be applied. The agency's suggestion then will be submitted to the finance ministry.

Agus added that his office also suggested the finance ministry increase the amount of luxury tax imposed on other electronic products and manufactured goods still considered luxury items.

He acknowledged that there were differences among government institutions in categorizing manufactured products.

"Every government institutions should possess the same perceptions in categorizing products as luxury goods or nonluxury goods," he said. (gis)