Jakarta. The Indonesian representatives
of Apple Inc, Samsung Electronics and other members of a local
industry group said smartphone sales could fall by as much as 50 percent if the
government imposes a tax on luxury models.
The
government is considering a 20 percent tax for smartphones retailing at or
above 5 million rupiah ($430), which would make Indonesia the most
expensive country in Asia to buy an Apple iPhone 5s.
The
tax would be part of efforts to protect domestic brands such as Evercoss Mobile
Phone and MITO Mobile, and slow a surge in imports that has caused a deficit in
the country’s current account.
The
tax would likely be voted on after a new government takes office in October,
officials said, and would follow similar action in the auto industry where this
month the tax for some luxury cars rose to 125 percent from 75 percent.
“The
purpose is to damp the influx of import products since domestic manufacturers
only produce low-priced handphones,” Budi Darmadi, director general at the
industry ministry, recently told Reuters.
The Indonesia Cellphone
Association said the tax would be detrimental to the smartphone industry, which
researcher IDC said was worth around $1.4 billion last year on shipments of
10.8 million units.
“If
the government applies the smartphone tax … it will increase illegal phone
sales in the black market and cut sales of legal phones by up to 50 percent due
to the different prices,” association Chairman Hasan Aula told Reuters.
Aula
is also vice president of mobile phone distributor PT Erajaya Swasembada.
PT
Samsung Electronics Indonesia Vice President Lee Kang Hyun said the
tax would make foreign investors rethink putting their money into Indonesia. He
declined to say whether the tax would have an impact Samsung’s investment in
the country.
Uncertainty
surrounding the tax could delay the construction of a local factory
by Taiwanese mobile component maker Hon Hai Precision Industry Co, industry
officials said. A Hon Hai spokesman declined to comment.
Local
manufacturer PT Aries Indo Global, however, said the tax could help it make 5
million Evercoss phones a month within the next few years compared with 1
million at present, said Aries Director Edward Sofinanda.
OPINION
In
my opinion, the smartphone includes criteria luxuary items and should be taxed.
Because a smartphone is not a basic need and only consumed by certain people.
Tax of real smartphone provides an opportunity for local industry to grow. At
the marco level, tax of smartphone will have a greater effect on domestic tax
revenue. Automatically it will change consumer behavior becomes postpone or
cancel the purchase of a new smartphone or switch to buy a local smartphone
such as Evercross at an affordable price and will not be taxed. As a result,
the smartphone from overseas markets such as Samsung becomes lethargic and
cause a decrease in profits this sector employers. However, the policy will
likely encourage the official consumers to turn to the black market. I expect
the government to have risk management to address these risks.