No more obligations on clove purchases: Official

No more obligations on clove purchases: Official

JAKARTA (JP): Cigarettemakers are no longer required to buy
cloves from PT Kembang Cengkeh Nasional (KCN) in order to be able
to purchase excise stamps from the customs and excise office, a
key government official said yesterday.

Director General of Customs and Excise Soehardjo said that as
an implication of the government's agreement with the
International Monetary Fund (IMF), the purchase of excise stamps
is no longer related to the purchase of cloves.

"There hasn't been any pressure from me to link the purchase
of the excise stamps and the purchase of the cloves," he told
reporters when announcing a new directive to reaffirm the January
1998 Presidential Decree, and a decree issued by his office in
February, which liberalized the purchase of excise stamps.

"So we're back to the mechanism (excise purchase) when BPPC
had not been introduced," Soehardjo said. BPPC is the former
clove monopoly, the Clove Marketing and Buffer Stock Agency.

Cloves are a major ingredient of Indonesia's aromatic clove-
blended cigarettes and the excise stamp is needed to sell the
cigarettes.

Under the IMF-sponsored multibillion dollar reform package,
Indonesia must dissolve the clove trading monopoly given to BPPC
by June.

The government, however, ended BPPC's monopoly status in
February as a commitment to accelerate the implementation of the
reform package.

But cigarettemakers said that they were still obliged to buy
cloves from KCN to enable them to buy excise stamps from the
custom and excise office.

Both BPPC and KCN are controlled by Hutomo Mandala Putra,
President Soeharto's youngest son.

BPPC was introduced in early 1991, and reportedly enjoyed
large profits from monopolizing the clove trade.

In a May 1 directive, Soehardjo ordered all customs and excise
offices throughout the country to supply the excise stamps
demanded by cigarettemakers and importers of tobacco end-products
without associating it to the source of clove purchases.

Soehardjo also denied media reports that he had been told in
no uncertain terms by the minister of finance to strictly follow
the government's decision to commit to the IMF-sponsored reform
package.

"The news is not true. I know that we have to follow the
reforms, that's why we've done the right thing," he said,
pointing to the decree he issued in February.

He said that the directive was needed so that cigarettemakers
outside the capital were well-informed about the new excise stamp
purchase mechanism, and to prevent rumors spreading.

"We will send this directive to all cigarettemakers," he said.

He also said that the current 1998/1999 fiscal budget targets
Rp 8.7 trillion (US$1.1 billion) in excise revenue.

During the previous fiscal year the excise revenue was Rp 5.3
trillion, higher than the target of Rp 4.8 trillion. (rei)