Rini opposes new import policy

Rini opposes new import policy

Adianto P. Simamora, The Jakarta Post, Jakarta

Minister of Trade and Industry Rini M. Soewandi said on Thursday
she had asked finance minister Boediono to drop the newly issued
decree requiring the country's importers to apply for a new
import license at the Directorate General of Customs and Excise,
marking another policy dispute among the members of President
Megawati Soekarnoputri's Cabinet.

"We have sent a letter of complaint to finance minister
Boediono over the new decree. We're asking the minister to review
it," Rini told reporters.

Rini, a former senior executive at automotive conglomerate PT
Astra International, clearly wanted to protect the interests of
importers. She said the new import registration policy would
"burden importers".

The Indonesian Importers Association (Ginsi) had also
previously called for the cancellation of the decree, saying that
giving extra administrative power to the customs office would
only lengthen the bureaucratic process.

Ginsi said that the importers had already obtained the
necessary license from the Ministry of Trade and Industry.

Rini also said that the authority to regulate export and
import activities in the country was still under her office.

"I will meet Boediono this week to seek a solution. I hope the
management of export and import will remain under the Ministry of
Trade and Industry," she said.

But Boediono, a long-serving bureaucrat, wanted to secure
greater revenue from the customs office as the government is
facing difficulties in shouldering the huge cost of the 1997
financial crisis.

The import registration decree, which would take effect on
Jan. 1, 2003, is aimed at curbing rampant smuggling which has
brought losses to the state.

The Directorate General of Customs and Excise is under the
Ministry of Finance.

This is not Rini's first policy disagreement with Boediono.
She has also had policy disagreements with other ministers over
trade and investment issues.

Experts have said that disputes between Cabinet ministers were
making Megawati's Cabinet team less effective in tackling the
country's economic problems.

Rini has repeatedly asked the Ministry of Finance to review
its tax policy on value-added tax and luxury tax on several
products to help boost the competitiveness of the countries
industries both at home and in the overseas markets.

Rini has also voiced concerns over the rampant smuggling
activities in the country, which have hit local manufacturers
unable to compete with cheaper smuggled products.

She has proposed the implementation of the pre-shipment
inspection (PSI) system to help curb rampant smuggling and under-
invoicing practices. Implementing the PSI system would
effectively circumvent the power of the customs office,
frequently criticized as a corrupt institution.

Meanwhile, Director General of Customs and Excise Edy
Abdurachman defended the new import registration policy, saying
that it was part of efforts to curb smuggling activities.

He explained that the new policy would give authority to the
customs office to gather sufficient information about the
activities of importers.

He said that some of the data on importers provided by the
Ministry of Industry and Trade was inaccurate, creating
difficulties for his office in monitoring the operations of
importers.

According to Edy, many importers submit fake addresses and
identities when they apply for an import license, making it
impossible to detect deviant importers.

He said that his office had discovered that more than 200
registered importers were phony, 600 others did not possess tax
payer identification numbers and another 100 importers could not
be audited.

Under the new import registration policy, the customs office
would send their officials to the importers' offices to verify
the information submitted by them.

Rini's recent policy disputes with economic ministers

With finance minister Boediono:

- Demanded the elimination of the 10 percent value-added tax on
some agriculture commodities and luxury tax on electronic and
automotive products.

- The revocation of the import registration policy.

- Called for the implementation of the pre-shipment inspection
system.

With agriculture minister Bungaran Saragih:

- Fought against the ban on imported chicken legs from the U.S.

- Opposed calls for a higher import tariff on rice, sugar, corn,
and soybeans.

With manpower and transmigration minister Jacob Nuwa Wea:

- Expressed objection to labor policies that were overly
protective of workers at the expense of businesses.