Upstream-Downstream Deregulation Gaps

Adhi S. Lukman, chairman of the All-Indonesia Food and Beverages Business Association (GAPMMI), was one person who failed to applaud when a House of Representatives (DPR) plenary meeting passed the 2016 amended state budget two weeks ago. In fact, he was so upset that he rushed to call a meeting of his fellow business associates and stakeholders. One policy in the government's revised budget worried him. "The amended state budget raised the target on customs revenues, and part of this plan was to come from excise taxes on plastic," Adhi told Tempo.

Indeed, the government hopes to earn an additional Rp1.89 trillion this year from, among other sources, excise taxes. Extending the number of taxable items is one option for the finance ministry to reach that target. Even though the official regulations have yet to be issued, this plan, which only needs to be signed to be carried out, has agitated Adhi and friends.

July 12, 2016