Indonesian food and beverage producers to Africa and Latin America are raising concerns with their government about high import tariffs in these countries.
In a report published in the Jakarta Post on Tuesday, the chairman of the Indonesian Food and Beverage Association (GAPMMI), Adhi Lukman, said “these import tariffs ranged between 20% and 40%.
“This contradicts the government’s push to increase exports to non-traditional markets, and therefore the government needs to do something to address it,” he said during a breakfast meeting for businesspeople at the Industry Ministry on Tuesday.
Food and beverages are among the leading products the country’s producers export to Africa and Latin America.
The Director General of Indonesia’s Trade Ministry, Oke Nurwan, admitted there was a problem and said the government should address the issue.
President Joko Widodo (center), accompanied by a number of ministers, speaks at an event to launch tax waivers for export-focused small and medium enterprises in Tumang village, Boyolali, Central Java, on Jan. 30.
“Our food and beverage industry sees a trade deficit, because of the low competitiveness caused by tariff barriers, among other factors,” he said. “We need time to negotiate with the countries, and while we do that, they can use available facilities like import tax waivers for materials for export-oriented goods [KITE].”
Through the KITE programme, Indonesian small and medium-sized manufacturers are able to get tax waivers from their government if they export 75% of their overall production.
The trade association (GAPMMI) said the country ran a -$767.84m trade deficit in its food and beverage sector with the rest of the world from January to November 2016. In all of 2015, the figure was -$276.09m.