JAKARTA: The new regulation that leads to the lower portion of companies’ sale--operating in the bonded zones--to the domestic market is criticized, as it may slash labor absorption in the region.
Several plants in the bonded zone are rejecting such deduction from the Directorate General of Customs and Excise, Chairman of the Indonesian Employers Association (Apindo) Sofjan Wanandi said.
“They would have to reduce workers and the government should not only think about the export revenue. Some Italy and India companies are protesting,” he said yesterday.
It takes a long time to change destination market from domestic to overseas. Moreover, most companies are now reducing their production for the rising difficulty in gaining order from overseas.
Last Friday, the directorate general announced that the companies in bonded zone can only market 25% of the export realization and sales between bonded zones during 2011 into domestic market by next year.
Such portion is smaller than this year’s regulation that allows companies in bonded zone to market their production to domestic market up to 50% of the export realization and sales between bonded zones during 2011.
It’s regulated in the Finance Ministry Decrees on Bonded Zone dated September 6, 2011, and Finance Ministry Decrees on Bonded Warehouse dated Augustus 26, 2011.
According to Sofjan, a big chunk of domestic market portion for bonded zone products is still needed to deal with the invasion of import goods from Indonesia’s free trade partner countries.
“It’s better for them to manufacture the product in Indonesia rather than produce it in China or Thailand, which then imported to Indonesia,” he said.
Besides threatening the labor absorption, he added, the alteration of domestic market portion to 25% from previously allowed up to 50% will likely cut the state revenue.
The government will find the tax revenue from the goods flow reduced, as the goods shipping from bonded zone to domestic market will be drastically dropped.
On the opposite, General Chairman of Indonesian Textile Association Ade Sudrajat said the 25% limitation is still too loose. He urges the government to cut domestic market portion to 10% of the export realization, to restore bonded zone function as export mover.
In addition, all bonded zones companies should be located in industrial area as the Directorate General of Customs and Excise is facing difficulty to supervise thousand bonded zone companies, which spread beyond the industrial area at various locations in Indonesia.
“Moral hazard may happen, since it’s unfair for other companies beyond the bonded zone just like them, but doesn't enjoy similar facility they have,” Ade said.
The allowance reduction to 25% from 50% is intended to increase the attractiveness of bonded zone for domestic and foreign investors, Daily Executive Director of Customs Facility at Directorate General of Customs and Excise Robert Leonardo Marbun said.
He affirmed that incoming raw materials for goods manufacturing industries, whose products will then be marketed in the country, is still subject to import duties.
The suspension of import duties along with the exemption of excise duty and import tax (PDRI) are only valid for products that are exported directly.
The newly released decree also obligates all companies in bonded zone to apply information technology system to record their export-import, that can be accessed by Directorate General of Custom and Excise.
Such technology will ease and accelerate the supervision on 1,500 bonded zones and 500 bonded warehouses in Indonesia. The supervision is also strengthened by clustering the bonded zone based on its location and industry sector. (t06/ags)