(Corrects government official's title in the fifth paragraph)
By Fathiya Dahrul and Randy Fabi
JAKARTA, April 24 The Indonesian representatives
of Apple Inc, Samsung Electronics Co Ltd
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
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
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
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.
($1 = 11,520 rupiah)
(Additional reporting by Yayat Supriatna and Rieka Rahadiana in
JAKARTA and Faith Hung in TAIPEI; Editing by Christopher