Anissa S. Febrina, Jakarta – Following complaints from local manufacturers over the extent of recent reductions in import duties, the Finance Ministry's tariffs committee will accommodate further requests for lower duties on imported raw materials, an official has said.

"There will be no 'third-round' of reductions, but we recognize the need to reduce the duties on some goods based on individual requests," said the chairman of the tariffs committee, Anggito Abimanyu.

The tariffs committee announced a second round of import duty reductions on Feb. 1, and will hold further discussions on possible duty reductions for additional products and the gradual harmonization of different types of duties by 2010.

The government has imposed import duties since 2004 on certain agricultural, fisheries, pharmaceutical and metal products that should have comparative advantages or are considered economically, socially or politically sensitive.

However, manufacturing companies have complained that this has made the import duties on some raw materials higher than those on processed and assembled goods.

The president of Japanese electronics manufacturer Toshiba, Yuji Kiyokawa, pointed to the high import duties on components and steel slabs – which are used in the assembly of electronics goods – as an example of the sort of problems the tariffs committee had to address.

"The government imposes duties of between 15 and 25 percent on components and steel slabs," Yuji said. "If these duties were lowered, Indonesia would clearly be more competitive." He explained that as the investment climate changed quickly, especially in the Southeast Asia region, companies were now more willing than ever to relocate. "Firms will go to those places that enjoy high levels of competitiveness," he warned.

Separately, Indonesian Chamber of Commerce and Industry (Kadin) vice chairman Rachmat Gobel said that the import duties on steel slab needed to be reduced.

He said that the import duties on upstream steel products, for example, could reach up to 20 percent while those on downstream products ranged between only 5 and 12.5 percent. Upstream steel products are used in the manufacture of electronic goods and machinery.

Kadin has repeatedly urged the government to reduce the import duties on raw materials to avoid Indonesian manufacturing companies being reduced to little more than packagers.