5 Percent Import Tax for Milk

“Of course [it was decided] after receiving advises from stakeholders, both the Association of Indonesian Milk Cooperatives (GKSI) and dairy farmers,” he said.
Bayu said after the dramatic increase in milk price in year 2007/2008, there was a decrease in November - December 2008.
But, currently the price is steadily increasing, hence the price margin between imported raw milk and domestically produced milk is not too great. Therefore, charging 5 percent of import tax is considered fitting.
On February 13, 2009, the government had lowered the import tax for milk from 5 percent to 0 percent. The tax reduction was recommended from the Ministry of Industry, saying it was to guarantee that fresh milk produced by dairy farms will be bought by milk processing industries (IPS) and to reduce the burden on consumers. The tax reduction policy was materialized through the Minister of Finance’s Directive No. 19 Year 2009 on Import Tax for Certain Imported Products.
This policy generated protests from dairy farmers, GKSI, and the National Milk Board. Since December 2008 until May 2009, the IPS had lowered the purchasing price for domestic milk. 
The greatest price reduction was done by PT Nestle Indonesia which lowered the purchasing price by 350 rupiahs per kilogram through two stages.
General Chariman of the Indonesian Cattle Buffalo Farmer Association, Teguh Boediyana greatly welcomes the decision to apply 5 percent of import tax for milk.
It will improve the trading position of farmers against the IPS. Teguh also demands a guarantee that milk produced by farmers will be bought.
A similar response was expressed by East Java GKSI Manager, Sulistyanto. He said this government policy will strengthen the purchasing capacity of farmers in the region. 
IPS Chairman Abdulla Sabana ensures that the application of import tax will not affect demands for domestic milk, since domestic production only contributes 20-25% of the total demand.
Sabana said he has not received an official letter from the government regarding the new import tax. But, he said that the policy will actually put more burden on consumers in the midst of reduced buying capacities.
Corporate Affairs Director of PT Nestle Indonesia, Sahlan Siregar, also said the increase of import tax will be a new burden for consumers. Despite that, he will still comply with government policies.
Sahlan advises the government to implement 5% import tax starting July 1, 2009. The industry must prepare planning, because when they decided to import the upcoming batch, they have not calculated the new import tax.
Meanwhile Bayu said besides the border tax policy, the government is also providing many direct supports for the development of domestic dairy farms and milk industries. For example by providing 145 billion rupiahs of subsidy for the purchasing of calves for dairy cows and beef cattle. (MAS)

Source : Kompas