JAKARTA (TheInsiderStories) – Government of Indonesia (GoI) is committed to combating illegal import activities by strengthening security coordination. Government insists that law enforcement must be upheld immediately.
Illegal imports do not pay for customs and tax, and this also affect national industries to be less competitive. This year’s estimated losses due to illegal imports reached Rp30 trillion.
From industry data, the estimated loss from illegal textile and wholesale imports is around Rp30 trillion in 2016. In the same year, the value of illegal imports of cosmetics and toiletries reached Rp 16 trillion or about 20 percent of total turnover is predicted to reach Rp 80 trillion.
Finance Minister Sri Mulyani said, the government will soon establish a special task force for combating illegal import practices. The task force will be filled by team from the Ministry of Finance, the Indonesian National Police, the army, the Prosecutor’s Office, the Corruption Eradication Commission (KPK), the Office of the Presidential Staff (KSP) and the Financial Transaction Reports and Analysis Center (PPATK).
She revealed, that around 1,500 importers are called as high-risk importers, and among 679 importers have not had a Taxpayer Identification Number. Finance minister added, importers engage in bribery practices for passing the goods in and out of ports and airports.
The imported goods supplied by the troubled importers consist of various types, ranging from textiles to electronic goods. But Sri Mulyani added that the illegal activities, also the high-risk imports, only account for 4.7 percen of Indonesia’s total import.
However, such an illegal activities, even small, would disrupt the state economy, create imbalances in business competition, and also undermine government institutions.
“We (the government) want to send message to entrepreneurs that we want to provide good service in carrying out legal economic activities,” Sri Mulyani said on Wednesday after coordinating meeting at Directorate General of Customs & Excise of Ministry of Finance on July 12. The formation of the cross-agency Task Force demonstrates the commitment of all parties in eradicating the illegal imports.
Ki Agus Badarudin, Head of Center for Financial Transaction Reporting and Analysis (PPATK), explained that in order to prevent further losses to the state, PPATK could examine the financial statements of importers suspected of having illegal activities. If there are findings of odd financial transactions, PPATK will report to the Indonesian Police as well as KPK.
“If the importers’ activities were related to money laundering, drug or terrorism transactions, we can direct them into further legal actions for the sake of enforcing the law,” said Badarudin.
Meanwhile Heru Pambudi, Director General of Customs and Excise, said the government may revoke the importer’s consent proven as violation. This is a punishment for stopping such a fraud.
In 2015, Indonesian Customs has secured illegal textiles imports worth US$1.028 million, equivalent Rp14 billion. The State also suffers the financial losses as the unpaid customs amounted to Rp2.3 billion.
General Gatot Nurmantyo, the commander of Indonesian National Army, mulls to cooperate with other countries as the transit for goods and commodities to Indonesia such as Singapore, Hongkong, Guangzhou, and Shenzen.
While Ministry of Industry has proposed to appoint two ports (Dumai and Bitung) to be the entry point for import of textile products, aiming for preventing the illegal import practices. The said ports are international standard ports.
For fighting against illegal import of cellular phones, Industry Ministry also plans to cooperate with Qualcomm in identifying them before entering Indonesia. The identification is directed to the number of cellular phones as listed on International Mobile Station Equipment (IMEI).
Based on Statistics Indonesia Bureau, the value of Indonesian imports in May 2017 reached $13.82 billion, up 15.67 percent compared to April 2017, but when compared to May 2016 increased by 24.03 percent.
Non-oil/gas imports in same month reached $12.00 billion, jump 16.49 percent compared to April 2017, but if compared to May 2016 increased by 26.65 percent.
Oil and gas imports in May 2017 recorded $1.82 billion, up 10.54 percent compared to April 2017, while compared to May 2016 increased by 9.10 percent.
The largest increase in non-oil imports in May 2017 compared to April 2017 was mechanical and mechanical equipment of $274.6 million (17.64 percent), while the largest decrease was sea floors and floating buildings of $58.4 million (54.02 percent).
The country’s largest non-oil/gas imports supplier during January-May 2017 was China with amount $13.67 billion (26.12 percent), Japan $5.82 billion (11.12 percent) and Thailand $3.77 billion (7.21 percent).
Non-oil imports from ASEAN are 20.77 percent, while the EU is 9.21 percent. The import value of all categories of good consumption goods, raw materials/auxiliaries and capital goods during January-May 2017 increased from 11.78 percent, 17.63 percent and 9.13 percent respectively. (EV)
The Insider Stories offer insight on Indonesia's economy. We provide a global reference for industry intelligence, news, information and data. We are the bridge that connects investors, the business community and policymakers. We are active across digital and events.