Jakarta – The Indonesian Malt Beverage Industry Association (GIMMI) has welcomed the government's decision to exempt the Batam free trade and port zone (KPBPB) in the Riau Islands from excise taxes on alcoholic beverages and tobacco.
"This [exemption] encourages healthy sales of alcoholic beverages in the KPBPB Batam and its surrounding areas," GIMMI executive committee head Bambang Britono said in a press statement issued on Monday.
According to the statement, the Finance Ministry's customs and excise directorate general ceased its excise tax documentation services starting at midnight on May 17. The service collected excise taxes on goods entering and exiting the KPBPB Batam.
The alcohol and tobacco excise exemption follows a recommendation from the Corruption Eradication Commission (KPK), which conducted an investigation into the distribution of cigarettes in Batam from November 2017 to April 2018.
The investigation found that 2.5 billion cigarettes were distributed in Batam during the period, indicating that the cigarettes were smuggled from Batam to other regions. The KPK recommended that Batam be exempt from the tobacco and alcohol excise tax on concluding its investigation.
"I believe the government's move to [exempt Batam from] the excise taxes will significantly reduce smuggling of consumer goods, including alcoholic beverages, to Batam and its surrounding areas that are not duty-free areas," Bambang said. (bbn)