LIQUOR FREE FROM LUXURY SALES TAX STARTING APRIL 1

Jakarta, Mar 15 (ANTARA) - Under a newly enacted fiscal law, alcoholic beverages will no longer be subject to luxury good sales tax effective next April 1, Finance Minister Sri Mulyani announced here Monday.

"Under the newly enacted law on value added and luxury good taxes, alcoholic drinks are free from luxury good sales tax as of next April 1. We will adjust the relevant tariff accordingly," the minister said after attending an illegal liquor destruction event.

She said the Trade Ministry was now also evaluating and on the point of adjusting its regulations on the liquor trade to the new law and thereby reduce the liquor smuggling frequency and ensure the state's income from duties.

Meanwhile, Director General of Duties and Excises Thomas Sugijata said under the new fiscal law, alcoholic beverages would henceforth be subject only to customs duties.

"There will be a revision of the income from duties target because starting April 1, 2010 we no longer collect luxury good sales tax from alcoholic beverages," he said.

With the scrapping of the luxury good sales tax on alcoholic beverages it was hoped state income from duties on imported alcoholic drinks would increase. So far imported liquor has been subject to duties, luxury good sales tax and value added tax which combined can amount to 400 percent of the beverage's price.