TEMPO.CO, Jakarta - Industry Minister Airlangga Hartarto said that the plan to lower gas prices for the textile industry is still being discussed, as high volume of imports and tax harmonization have become issues that need to be addressed.
“The discussion of [gas prices] for the textile industry has not completed yet. There is problem related to imports, and it was found that some people have been using import facilities provided by manufacturers,” Airlangga said in Jakarta on Thursday, December 1, 2016.
Airlangga explained that small-scale manufacturers imported products as many as possible to be sold again. Airlangga added that there was a problem with tax harmonization, where the value added tax for imports is set at 2.5 percent, while that for domestic products is set at 10 percent.
“So, the 7.5-percent gap for the textile industry is very significant,” he said.
Achmad Sigit Dwiwahjono, director general of textile and various industries at the Industry Ministry, revealed fabrics have been the largest imported commodity in the industry, despite the fact that Indonesia’s textile industry has been integrated.
“Due to high imports, domestic industry utilization is declining. So, this must be regulated,” Sigit added.
Therefore, Sigit said that the government will resolve the issue in meeting.