Jakarta urged to reduce luxury tax
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Indonesian hotel and restaurant business representatives are calling on the government to urgently reduce the 300% luxury tax now being imposed on liquor. Calling for at least a 50% reduction in the current tax tariff, Carla Parengkuan, Executive Director of the Indonesian Hotel and Restaurant Association (PHRI), said; “the current tax, which is 300%, is too high, so liquor is very costly.”
Quoting local dailies, Bali Update (www.balidiscovery.com) said Parengkuan had blamed high liquor prices as causing distributors to place small orders for sales stocks, a factor that has reduced supply and prompted the already high prices to increase even further. There is little doubt, according to the PHRI executive that the high cost of liquor is costing Indonesia tourism traffic, the report said.
Also of concern, she was quoted saying, was the presumption that the heavy customs duties now being sought for liquor might lead to smuggling increasing.
Quoting a Jakarta Post report, the PHRI, the Indonesian Retail Business Association and the Indonesian Modern Market Supplier Association were forming a single chorus complaining that new custom rules was impacting badly on their businesses.
The report had also said that the sudden dramatic increase in the cost of luxury goods will also mean that wealthy Indonesians and expatriates would do their shopping abroad, reducing much-needed local spending.
Hotels and restaurants that relied on imported goods to maintain high stands of food and beverage were complaining that not only were prices much higher, but availability was also becoming a big problem, Bali Update said.
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