Police probe firms over smuggling

Police probe firms over smuggling

Rendi A. Witular, The Jakarta Post, Jakarta

The police launched Tuesday investigations into dozens of
companies suspected of smuggling and tax fraud in a new effort to
show the government's seriousness in fighting the crimes blamed
on causing severe damage to Indonesia's local industries.

The police will be assisted by the directorate generals of
customs and excise, and tax in the investigations.

The three agencies agreed to launch the investigations during
a meeting Tuesday at the Crisis Center's office at the Ministry
of Industry and Trade, according to the center's chief executive
Sofyan Wanandi.

Sofyan said the center had provided them with the list of
suspect companies, which the center had gathered based on
information provided by the country's business associations.

Sofyan said the investigations would first focus on textile,
garment and electronic companies as these local industries were
the most affected by the smuggling and tax fraud practices.

"We need prompt action to stop and prevent such practices, or
else our domestic manufacturers will die and will lead to major
unemployment problems," Sofjan said.

Sofyan refused to name the companies, but sources at the
ministry of industry and trade said they included big companies.

Local textile, garment and electronic manufacturers have
repeatedly complained about the rampant smuggling as they were
unable to compete with the illegally imported products on the
domestic market.

They also complained that many importers undervalued their
imports to cut duties, which enabled them to sell their imported
products cheaper than those made locally.

"Aside from hurting local manufacturers, these practices
(smuggling and undervaluation) cause huge losses in revenue for
the government," Sofjan said.

Sofyan said the government needed to protect the existing
textile, garment and electronic industries given the huge number
of workers employed by the industries.

The Crisis Center was set up in August this year to help
resolve various problems in the business sector in a bid to
encourage investors to come to the country or maintain their
operations here.

The body is chaired by Minister of Trade and Industry Rini M.
Soewandi.