INFA, Asperindo refuse flawed income tax policy

The Indonesian Forwarders' Association

(INFA), Indonesian Express Delivery

Companies' Association and seven

other associations of service-providing

companies have rejected Indonesia's

new income tax policy, which became

effective on January 1.

Asperindo chairman Johari Zein said

the new income tax regulation is not

improving the industry as it adds more

burdens to members.

"The problem is that courier companies can spend more on administrative

procedures, and even can lead to double payment at the end of the year," Zein said.

The new regulation No. 178/2006 stipulates that all service users, including

users of courier services, must collect 3 percent of total charge levied upon

them by service provider. "We reject it because it will not bring this industry

forward, but backward," Zein

said.

Similarly, INFA vice chairman,

Iskandar Zulkarnaen in a recent meeting of nine associations aimed to annul the

regulation, said the new withholding tax is against other government policies.

"It's against Indonesia's tax system which holds the principle of

self-assessment," Zulkarnaen said.

The new regulation is also against

Presidential Decree No.3/2006 that endorses new policies on improving

the investment climate.

The decree upholds dialog with

companies for any policy tightly connected

with investment in Indonesia.

"But we don't see dialogue in the new

policy, neither there is socialisation

by the excise directorate," he emphasised.

The new policy also neglects Law

17/2000, particularly article 23, which

stipulates that the excise, in order to

determine the net income, must make

use of a company's internal data and

information, not by baseless estimations. Zulkarnaen was also worried of

negative impacts that the new regulation

can cause on forwarding industry

in the country.

"If we don't act against it now, I am

afraid it will gradually kill the logistics

and transportation sector, as well as

other service sectors," he said.

Responding to the appeal of the

associations the directorate of excise

has formed a committee to re-study

the regulation. In the last meeting

with representatives of Indonesian

Chamber of Commerce and Industry

(Kadin) and several service providers'

associations, the representative of

excise directorate promised to the

associations for a solution by the end of

March.

¨C Siktus Harson