INDONESIA: Gov’t seeks new excise on plastic bottles

The government plans to impose a new excise on plastic bottles in an attempt to increase revenue for state coffers this year.

Under the revised 2016 budget draft, the government would require companies or customers to pay between Rp 200 to Rp 500 for each plastic bottle used, Nasruddin Djoko Surjono, head of duty and exchange at the Finance Ministry's fiscal policy office. Some plastic containers, like the mineral water gallon jar, would be exempted from the new excise, he said. "We need new excise objects as our excise revenue has dropped in the first quarter this year," Djoko said.

Excise revenue dropped to Rp 7.9 trillion (USD 602 million) in the first three months this year, down 67 percent from Rp 24 trillion in the same period a year earlier.

Djoko said Indonesia will follow in the footsteps of countries which use excises to reduce consumption. Earlier in February, the government imposed a small fee on plastic bags on the back of similar environmental concerns.

The plan, however, still awaits approval from the House of Representatives.

Andreas Eddy Susetyo, a lawmaker from Democratic Party and a member of the House's commission XI overseeing finance and banking, welcomed the plan saying it would reduce state finance dependence on excise from cigarette sales. Hanjaya Mandala Sampoerna, the country largest cigarette maker, contributed Rp 54 trillion — or a more than a third of the government's excise revenue — in 2015.

Business meanwhile opposes the plan, arguing that it would increase costs and hamper sales in the beverages industry.

"Moreover, plastic bottles is highly recyclable. Just go to any landfill and you would barely see plastic bottles there; it is the first thing any scavenger would pick up," said Adhi S. Lukman, the chairman of Indonesia Food and Beverages Association (Gapmmi).

Source: Daily “The Jakarta Globe”, Jakarta; 12 Apr 2016
(Syed Rashid Ali, Karachi, Pakistan)