Phone manufacturers against planned 20% tax in Indonesia

Phone manufacturers against planned 20% tax in Indonesia

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Mobile phone manufacturers have asked the government of Indonesia to give up on the upcoming plans to introduce a 20% sales tax in the country. The manufacturers have forwarded the request due to concerns that this kind of policy can result in an increase of illegal imports.

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Indonesian government has plans to impose a 20% tax on luxury goods and almost all types of mobile phones will be included. The decision to impose the luxury tax was made in order to develop the country’s mobile phone industry. The chairman of the Indonesian Cellular Phone Association (APS) – which represents mobile phone manufacturers, as well as distributors – Hasan Aula said that the tax will immediately result in increased phone prices because vendors are going to directly pass on the costs incurred by the tax to their customers.

During the press conference, Hasan said, “A significant price gap between legally imported phones and illegally imported ones will inevitably stimulate the growth of a black market”. Those mobile phones which are sold in the black market can jump from the current number of between 20 to 30 percent of national sales to 50 percent.

In 2013, the government planned to allow telecom operators to curb the circulation of illegally imported cellphones with the help of the IMEI, which is an identification code unique in every handset.

Photo Credits: ZDNet