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Exporters and importers may finally be seeing some light at
the end of the tunnel as the House of Representatives appears set to
approve amendments to the Customs Law that promise to cut bureaucracy
and improve services.
However, whether the amended legislation will indeed prove to be a boon
for Indonesia's trade and investment still has to be proven as it also
introduces a new "outbound customs duty" on certain strategic products
in order to protect security of supply on the domestic market. It is
feared that this new duty could hamper the flow of trade.
The House is scheduled to approve the government-proposed amendments to
the 1995 Customs Law during a plenary session Wednesday.
The amendment bill is part of the government's plan to revise
Indonesia's taxation, customs and excise, and investment legislation so
as to improve the business and investment climate.
"The revision of the Customs Law is basically intended to change its
function from merely being a fiscal instrument into more of a means of
improving the customs office's services and the prevention (of
smuggling)," the chairman of the House committee deliberating the bill,
Irmadi Lubis, told The Jakarta Post.
Irmadi said that some of the most important changes to be introduced
involved reducing the bureaucratic chain and the time needed to process
declared goods to 30 days at most.
"Customs-related procedures will no longer be set out in detail by
government regulation, but can be issued through decrees of the finance
minister or even the director general for customs and excise," he said.
"This will make customs-related services more flexible and better able
to adapt to current needs."
Irmadi said that under the newly amended law, importers and exporters
could now require the customs office to process their declarations, and
the calculation of customs duty and processing of its payment, within
30 days or less.
"The only exception is where the customs office has to conduct a
detailed inspection on a shipment of goods. This must be completed
within a maximum of 60 days," he said.
No time limits are specified in the current Customs Law.
However, Irmadi admitted that the revised law would also include the
introduction of a new "outbound customs duty" of up to a maximum of 40
percent of a shipment's value, which he said was to guarantee the
security of supply of certain products on the domestic market.
"With the recent price increases affecting certain commodities, like
crude palm oil and coal, there will be a tendency to prioritize exports
and neglect the local market. This new arrangement will prevent such a
situation from arising," he said.
The Association of Coal Exporters had recently objected to such export
duties by filing a case with the Supreme Court, which eventually struck
them down.
When asked whether the new duty could adversely affect trade and state
revenue, Irmadi said that the trade minister and finance minister would
carefully determine which products should be covered.
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