Wednesday, December 21, 2016
Govt. to Impose Excise over Plastic Commodities in 2017
Marcell Sihombing, Fathan Qorib/ANT
Heru Pambudi, Director General of Customs and Excise (Director General) at the Ministry of Finance (Ministry), has recently announced a plan to impose excise on various plastic commodities in 2017. Provided that the House of Representatives issues its approval, Director General Pambudi confirmed that the Ministry will draft a regulation for the implementation of the excise. Director General Pambudi also revealed that the planned excise on plastic commodities could, and ought, to have been imposed during 2016. Projections – as incorporated into the country’s Amendment to the State Budget – indicate that revenue generated from an excise on plastic commodities could have reached up to IDR 1 trillion. The Government and Commission XI of the House had planned to deliberate the excise before 2016 came to a close, but this agenda was not followed through before the House went into recess for the year. As such, discussions must now be shifted to 2017.
“We [the government] have done all the necessary preparations and are now waiting for a follow-up from the Commission XI of the House,” Director General Pambudi said.
Director General Pambudi also revealed that the government’s proposal, for only plastic commodities to be incorporated into the current list of excisable goods, stands because the potential inclusion of other commodities remains subject to further internal review.
“Plastic commodities, especially plastic bags, have severe environmental impacts. From [a total of] 17% of the country’s plastic waste production, 67% of that waste derives from plastic bags. For this reason we [the Ministry] prioritized establishing control over plastic commodities through the imposition of excise duties,” Director General Pambudi added.
With respect to systemic features and other technical aspects concerning the planned excise, Director General Pambudi explained that such details must be determined through discussion with the House. As such, definitive features and measures to be covered in the relevant regulation have yet to be formulated. Meanwhile, in response to the potential IDR 1 trillion losses in revenue flowing from this year’s failures to implement an excise over plastics, Director General Pambudi strongly hopes that these losses may be compensated by the current surplus in export duties, which will amount to some IDR 400 billion by the end of 2016.
Previously, the government had implemented a paid plastic bag policy in 22 cities across the country. However, the Indonesian Retail Business Association (Asosiasi Pengusaha Ritel Indonesia – “APRINDO”) decided to suspend implementation of this policy in various modern retail stores starting from 1 October 2016, until the government issues an official regulation. The Indonesian Consumers Organization (Yayasan Lembaga Konsumen Indonesia – “YLKI”) also approved this suspension, despite its generally strong support for reducing plastic bag usage in the name of environmental protection.