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)