PC suppliers welcome plan to scrap luxury sales tax

PC suppliers welcome plan to scrap luxury sales tax

JAKARTA (JP): A computer dealers group welcomed on Tuesday the government's plan to revoke the luxury tax imposed on personal computers (PC), saying the move could lower PC prices by up to 20 percent.

"PC prices will be back to an affordable level for many members of the public, if the government sticks to its plan of scrapping it (the luxury tax)," Hidayat Tjokroadjojo, chairman of the Indonesia Computer Dealers Association (Apkomindo), told The Jakarta Post.

He was commenting on a report that the government had been reviewing luxury taxes imposed on several products, including PCs, laptops, shampoo, electric irons, following the public outcry. The luxury taxes on the commodities were imposed on Jan. 1.

Local papers said the government plans to abolish the luxury taxes on July 1.

According to Hidayat, computers should not be considered luxury goods because of their function of educating people in information technology (IT) and to bridge the digital divide between developing and developed countries.

The revocation of the luxury tax on PCs would do a great deal of good for IT development in this country, Hidayat said.

Hidayat, however, warned that the government should realize its plan as soon as possible, because even a delay of one month in making a decision would create great uncertainties in the industry, which could impact PC supplies in the domestic market.

He said importers had delayed import plans as a consequence of the government's decision to review the tax policy. They would only resume importation after the government made a final decision.

This wait-and-see situation could result in the shortage of PC supplies on the domestic market, which in turn could cause a high rise in PC prices, Hidayat explained.

He said aside from the luxury tax, PC prices had soared over the past several months on the downfall of the rupiah against the dollar.

Hidayat said PC sales were estimated to fall by at least 20 percent to 320,000 units this year, from 400,000 units last year due to high prices coupled with weaker consumer spending.

"But, the sales are likely to fall 30 percent to 280,000 units if the political situation in the country worsens," he added. (03)