RI customs law triggers panic
RI customs law triggers panic
JAKARTA (JP): Frightened producer importers have stockpiled
six months of supplies, fearing that the implementation of the
1995 customs law starting on April 1 could hinder the flow of
imports for quite some time.
The Indonesian Importers Association's chairman, Amirudin
Saud, said yesterday the stockpiling of raw materials was likely
to cause a deficit in Indonesia's merchandise trade balance
during the first three months of this year.
However, he continued, the country would regain a surplus in
merchandise trade after April 1, when the customs office
introduced its new imports procedures.
"Importers worry that the customs office cannot ensure smooth
flows of imports after April 1, considering there is to be no
transition period for the new customs procedures. That's our main
concern," Amirudin told journalists after addressing a tax
seminar here.
"However, we do hope the flow of goods after April 1 will be
as smooth as and even smoother than the current system of
preshipment inspections," he added.
The current preshipment inspection system requires all imports
to be checked by the designated surveyor, state-owned PT Surveyor
Indonesia, at points of loading.
The new customs procedures involve self-assessment on duties
and taxes due, on-arrival inspections and post-release audit.
Amirudin said importers usually stock raw materials for no
more than three months due to the high cost involved.
"They stockpile many raw materials because they do not want
their production to be hindered by the unavailability of raw
materials," Amirudin said.
Amirudin said importers who had stockpiled imported raw
materials include those working in the textile, footwear, plastic
and steel industries. Such industries depend on imported
elements.
Indonesia recorded a trade surplus of US$6.94 billion last
year. The trade surplus was built on total exports of $49.81
billion against imports of $42.86 billion.
Last December alone, exports amounted to $4.68 billion, $3.76
billion of which was from oil and natural gas. Imports in the
same month totaled $3.76 billion.
Speaking on taxes, Amirudin said importers paid $5.35 billion
last year in taxes, mainly in 10 percent sales tax and 2.5
percent withholding income tax on their imported goods.
"That does not include import duties and value-added tax
imposed on a number of imported products," Amirudin said.
Services
While recording a surplus in merchandise trade, Indonesia has
had a much higher deficit in services, mainly from foreign debt
servicing as well as from financial and freight account deficits.
The government has projected that the country's deficits in
services would reach $15.2 billion next fiscal year, from $13.97
billion this fiscal year. The biggest deficit has always been in
the sea transportation sector.
Indonesia is projected to spend $5.61 billion in foreign
exchange on paying foreign shipping companies to transport
Indonesia's exports and imports next fiscal year, which begins in
April.
Foreign shipping companies transport more than 95 percent of
Indonesia's exports and imports.
The government has taken various steps, including the
scrapping of value-added tax on the purchase of vessels, to
empower local shipping companies to transport more exports and
imports. However the situation has not improved significantly.
To reduce the deficit, Amirudin suggested that the government
introduce a ruling requiring importers to pay their freight in
rupiah.
"It's quite an easy business. By introducing that measure, you
would be able to reduce the deficit in freight alone by 10 to 20
percent," Amirudin said.
He also suggested the government empower state-owned shipping
companies by providing them with soft loans to buy more vessels.
"We importers also want to use local shipping companies to
transport our imports. However, we just cannot find enough
locally owned vessels for our imports," he said. (rid)