Import Duty Hikes Do Not Affect Purchasing Power

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  • Pengunjung memadati pusat perbelanjaan di Mall Grand Indonesia, Jakarta, 26 Juni 2015. Pengunjung mall diperkirakan meningkat 40 persen selama bulan Ramadan. TEMPO/Wisnu Agung Prasetyo

    Pengunjung memadati pusat perbelanjaan di Mall Grand Indonesia, Jakarta, 26 Juni 2015. Pengunjung mall diperkirakan meningkat 40 persen selama bulan Ramadan. TEMPO/Wisnu Agung Prasetyo

    TEMPO.CO, Jakarta - Indonesian Consumers Foundation (YLKI) executive chairman Tulus Abadi said that new Finance Ministry’s regulation on import duty hike would not affect local people’s purchasing power.

    “Lower middle class consume local products. Meanwhile, upper class people have strong purchasing power and are loyal to certain brands. So, they would continue to buy them despite price hike,” Tulus said as reported by Bisnis on Saturday, July 25, 2015.

    However, Tulus reminded the government and business owners to improve local products’ quality. According to Tulus, upper class people and expatriates could change their preference to local products, provided with good quality.

    “The quality of our products is equal to imported ones. Local business owners need to build their images and brands to make it more prestigious,” Tulus explained. 

    Donny P. Joewono, head of Bank Indonesia for Jakarta, said that an increase in import duties would not affect people’s purchasing power.

    “Consumers of imported goods are upper class people and expatriates. I think they would continue to buConsumers of imported goods are upper class people and expatriates. I think they would continue to buy them despite price hikes,” Donny said. 

    Donny clarified that the increasing import duties would have a positive impact on the country’s trade balance. 

    Earlier, the government enforced a new regulation on import duties on Thursday, July 23, 2015. At least there are 18 types of food and beverages imposed with an import duty of 20 percent. The import duty for fermented drinks and vermouth jumped to 90 percent, while that for alcoholic drinks was raised to 150 percent. 

    BISNIS.COM