Ahmad Hijazi: Batam Trade and Industry Agency chief. (Tribunnews.com)
The Batam administration wants the central government to halt importing cars to Batam, claiming that the central and local governments are not collecting value-added (PPN) and luxury (PPNBM) taxes.
“Most of the import car trade manipulates consumers, as well as creates unnecessary traffic gridlock in Batam. The government should stop the policy,” Batam Trade and Industry Agency chief Ahmad Hijazi told The Jakarta Post on Wednesday said.
Under current tax exemptions, car prices in Batam should be 75 percent less than those of sole authorized agents. However, prices in Batam were about the same with vendors outside Batam.
“The central government might have lost potential tax income while Batam residents bear the traffic jams. The local industry did not benefit,” Ahmad noted.
Citing an example, Ahmad said that Honda Jazzes were priced by importers at Rp 195 million (US$21,060), while a local Honda dealer’s website offered a starting price for the cars at Rp 199.5 million.
In response, Batam Indonesia Free Zone Authority spokesman Ilham Eka Hartawan said that the authority could not control local car prices.
The Batam administration previously announced plans to revise a local bylaw to stop the import of vehicles.
The central government issued a tax-exemption policy for cars in 2010, authorizing the local authority to issue permits to local importers, who have since imported 1,200 cars into Batam. (swd
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