BI Hails Govt Plan to Raise Tax on Import

Jakarta (Antara) - The Indonesian central bank, Bank Indonesia (BI), has welcomed the government's plan to increase the tax on imported consumer goods in an effort to reduce the country's current account deficit. "I hail the plan as it is in line with the August economic package under which luxury goods or inessential goods for current activities are subject to additional taxes or import duties," BI Governor Agus Martowardojo said on the sidelines of the Global Entrepreneurship Week (GEW), which started here on Wednesday. According to Article 22 of the Income Tax Regulation, duties on goods imported by importers with API (importer identification numbers) will be subject to a 2.5 percent tax on the import value of the goods. Goods imported by importers with no API will, however, be required to pay a tax of 7.5 percent on the import value or 7.5 percent of the value of the goods if auctioned. "The government's plan to increase tax on imported consumer goods is a good plan. We are convinced it will have a beneficial impact if properly implemented," the BI governor added. Agus said other measures should also be taken on a national scale to control exports and boost exports to improve the health of the Indonesian economy. Meanwhile, Finance Minister Chatib Basri said on Monday that the increase in sales tax on imports would not negatively affect the financial performance of companies or states. "State receipts will not disappear. Companies can pay in instalments. The effect on cash flow will occur only during actual payment," the minister added. (*)