Tax breaks could lower price of electronic products
Tax breaks could lower price of electronic products
Arya Abhiseka, The Jakarta Post, Jakarta
The price of electronic products is expected to drop after the
government announced tax breaks last week for some products.
The lower price should also help create a more vibrant market.
"I hope it will work, as many consumers have been discouraged
by the utility price increases, resulting in a slow market," said
Jeanette, a retailer at Harco Plaza, Glodok, West Jakarta, over
the weekend.
She hoped the reduction in the price of electronics products
would occur in the coming few months.
She said, for example, that her shop was now selling a 14-inch
television set for around Rp 700,000, compared with its former
price of Rp 825,000.
"It would be good if the market started to heat up again, then
maybe I could sell a TV set at a price even lower than Rp
700,000," Jeanette said.
Earlier this month the government raised the price of fuel
products, electricity and telephone charges as part of efforts to
cut expensive subsidies. The simultaneous price increases will
cut into the public's purchasing power and cause the production
costs of many companies to soar, both of which would definitely
hamper local electronics manufacturers already struggling to
fight with cheaper, smuggled products.
To help avoid the negative consequences, the government
introduced last week a luxury tax cut and exemption for dozens of
electronic products, such as TVs, washing machines, air
conditioners and mobile phones.
Apart from easing the burden on electronic goods manufacturers
as a result of the utility price hikes, the policy should also
assist them to compete better against cheaper smuggled products.
But electronics producers have yet to decide on whether they
will lower the price of their products.
"We are still making the necessary calculation," said one
official of an electronics company.
But the official added that there was a possibility for the
price to decline by 10 percent to 20 percent, particularly on
those products that would enjoy luxury tax exemption.