Regional Levies and Taxes Hamper Food Industry Growth
Friday, 02 February, 2007 | 13:39 WIB

TEMPO Interactive, Jakarta: Increased levies at regional level have resulted in the food and beverages industry not reaching its growth target in 2006 of 5.5 percent.

Up to the third quarter of 2006, the growth of this sector was only 4.7 percent.

Franky M.A. Sibarani, Director of Regulation at the All-Indonesian Food and Beverages Businesspeoples Association, said that this sector's growth until December 2006 was predicted to be only five percent.

"It's difficult to reach the (5.5 percent) target," he said.

Franky explained the main factor that hampers the efforts of reaching the growth target was there being so many levies at regional level that burden industry players.

The levies have caused extra costs amounting to between two and six percent of total production costs.

In addition to levies at the regional level, he explained that there were many kinds of taxes that also placed a burden on the food and beverages industry.

The taxes include sales taxes for base commodity purchases of 10 percent, value-added taxes for shipping costs of 10 percent, income taxes for shipping services of six percent, advertisement sales taxes of 10 percent and advertisement income taxes of six percent.

MUHAMAD FASABENI