The Role Of Customs And Excise Agency

The Role Of tradition And Excise AgencyThe rapid pace of sphericisation is inevitable. Such a rapid global work is set by technological changes on transportation and communication, the increasing of population, and multilateral trading agreements. In most aspects, global concern has brought galore(postnominal) benefits. It opens up a whole range of job opportunities to the citizens, provides affordable goods and services, accelerates economic ontogeny and offers prosperity to the country. Then, participating in the global consider is desirable.Even though the gains from global patronage are obvious, economist agree that the greatest gains go to the country that slashes its own barrier (World Trade Organizations, 2013). There are galore(postnominal) forms of manage barrier such as tariffs, quotas, and antidumping duties that may impede mart integrations. Thus, stack barriers bring function a lively issue to be solved.Reducing tariffs and non-tariffs barriers go for become a way to spank trade barrier issues. However, this prescription has non always led developing countries to master desirable gains from global trade. Wulf (2005) pointed come forward that there are nigh factors that go forth to the failure of some(prenominal) developing countries to generate economic benefits such as poor trade logistics environment and high transaction costs including springer headway costs.Further, as the growth of global trade, the movement of people, goods, and services crossways around the globe has increased rapidly. It brings serious challenges in which demand some forms of revenue collection as good as entrap protection. In this point, springer and Excise effect as one of key moulding agencies should take in place. custom and Excise substance are anticipate to perform properly to meet the global trade challenges.Indonesia, the largest archipelago country in the world, has a strategic position crosswise major sea lanes from Indian to Pa cific Ocean. Its strategic position has led and fostered world(prenominal)istic trade. This country has become an attractive market because its large population, its economy size and its active social rank in many regional trading arrangement (Salim, 2011).On the former(a) hand, Indonesia is not only if an attractive market for traders but also it becomes a po tennertial hotspot for transnational organised crime. These situations demand some forms of impressive border protection as soundly as revenue collection. In this point, customs and Excise service has responsibilities to deal with the goods crossing the borders of the country, including counter nefarious cross-border activities and tractor trailer the cross-borders threats. It is clear that Custom and Excise manner, as a border see to it authority, needs to overcome these new challenges.Regarding to this issue, this paper impart specifically discuss the role and responsibilities of tradition and Excise agency in I ndonesia. To some extent this paper also discusses the challenges that Indonesian usage and Excise agency will be faced as it moves toward 2020.The Role of Indonesian customs and Excise AdministrationIn general, Indonesian usage has its roles as trade facilitator, industrial assistance, revenue collector, and community protector (Bea dan Cukai, 2013). As changes in the international trade pattern and the world have become borderless, trade will flow toward efficient environment where barriers in trade are eliminated. It seems that the global trade simultaneously requires an efficient and competitive market. As a consequence, many regional, bilateral, and multilateral trade initiatives are trying to reduce tariff and non-tariff barriers gradually.As the tariffs liberalisations are already implemented, Love and Lattimore (2009) stated that there are new(prenominal) main barriers of trade in developing countries, such as springer and administrative technical and turns. Since 1994 , Indonesia has adjusted its tariff to be in establishment note with World Trade Organizations commitment (WTO, 1998). However, Indonesia-European Community (2007) pointed out that Indonesian government consistently fail to generate optimal revenues as surface as offer a fair treatment for investors because of its governance problems, particularly in the customs and tax administrations. Similarly, Wakamatsu and Iwakami (2005, p. 14) pointed out that in Indonesia, customs and headway as one of the major issues to be improved in the business and investment environment.It is clear that international trade requires efficient and effective as intumesce as simple and clear customs procedure. In response to this challenge, Indonesian government has enacted Law Number 10 Year 1995 on Customs which later it is amended with Law Number 17 Year 2006 on the Amendment of Customs Law (Bea dan Cukai, 2013). In general, these devil laws have led Customs and Excise agency to accommodate the dem and of international trade as the consequence of Indonesias participation in the ratification of General Agreement on Tariffs and Trade (GATT), ASEAN Free Trade Area (AFTA), Asia-Pacific Economic Cooperation (APEC), and other trade agreements (Bea dan Cukai, 2013).Customs agency break aways a significant role as a trade facilitator. The WTO defined trade facilitation as simplification and harmonization of international trade procedures, including activities, practices, and formalities involved in collecting, presenting, communicating and processing entropy and other development required for the movement of goods in international trade (WTO, 2001). Thus, carrying out its roles and responsibilities as trade facilitator requires effectiveness on customs clearance processing. In international trade, lengthy time on customs clearance does really matter. The more complicated its procedures will increase time delays on clearance, and it will increase costs of doing businesses. As a re sult, Indonesia will be less competitive in the international trade.Indonesian Customs has acknowledge this challenge. Reducing time delays on customs clearance as well as reducing the cost of doing business can be achieved by simplification and modernisation systems on customs clearance. Even though Indonesia has not signed The Revised Kyoto regulation yet, Indonesia has adopted some principles on Kyoto Convention, including simplification, harmonization and modernisation of Customs administrations.In 1997, Customs has started to use Electronic entropy Interchange (EDI) system in which it provides an alternative for the client in the procedure of lodging a customs declaration (Bea dan Cukai, 2013). Later, in 2010, Indonesia has started to implement Indonesias bailiwick Single windowpane (INSW) as part of Indonesias commitment to ASEAN. The development of the INSW was driven by Indonesias commitments to ASEAN on a lower floor the Agreement to Establish and Implement the ASEAN S ingle Window that was signed in 2006 (OECD 2012, p. 53). Through this single window, it would improve the flow of exports and imports.Bayhaqi (2011) pointed out that Indonesia has achieved significant rreductions in customs clearance time and technical control for both, imports and exports. For imports, the time taken to customs clearance decreased from seven eld in 2006 to four days in 2010, while for exports, it decreased from two days in 2006 to one day in 2010 (Bayhaqi, 2011). However, due to its boundary on information technology systems and legal issues think to information agitate among government agencies and private sectors, the paperless trading through the INSW is only available for a relatively small group of about a hundred traders, which have advanced and qualified technology systems for post clearance audit facilities (OECD, 2012). In the future, Indonesia needs to accommodate and facilitate other traders to use INSW as well as establish cross-border paperless con nection within ASEAN countries.Conservatively, the role of Customs agency is as a gate keeper to collect revenues. However, as the big expansion in people and goods movement, the role of customs agency is not only to collect revenue but also to facilitate trade and protect the community. The needs of Customs agency can be alter among the countries, but in an archipelago country like Indonesia, Customs plays a critical role as the first line of defence against transnational crimes, smuggling, drugs trafficking, terrorisms, outlawed fishing, extrajudicial logging, and other illegal activities.As a timber producer, Indonesia has struggled with issues related to illegal logging. Luttrel et.al (2011) calculated that the government was losing US$600 million to US$ 8.7 one million million per year because of illegally harvested timber activities. Scheyvens and Casero (2010) pointed out that there are many forms of illegal logging activities that against customs law such as exportation timber without a licence or proper documents, undervaluing export prices and volumes and misclassification or misdeclaration of word mathematical products, re-routing and trans-shipment fraud of cargo, attempted grafting, and so on.Goncalves et al. (2012, p. 12) stated that Customs officials play an important role in detecting illegal logging because they are in a position to prevent the movement of unauthorized shipments across borders with false documentation. On the other hand, Scheyvens and Casero (2010, p. vi) pointed out that Customs administrations have only a little or no external support or background information to assist them, except for customs declarations and accompanying documents.In another point of view, Scheyvens and Casero (2010) stated even though exporting countries have clear procedures for wood export permit and verification, its requirements for the clearance of wood product consignments are not well known by Customs agencies in importing countries. To som e extent, Customs in the importing countries may not have powers to prosecute imports of illegal timber (Scheyvens and Casero, 2010).In order to overcome this issue, one of the approaches is to prevent the flow of illegal timber entering the importing countries. It can be achieved through Customs agencies co-operation and collaboration between exporters and importers countries. Thus, information sharing among Customs agencies is crucial.Indonesia itself has engaged in many regional Customs networks, and initiatives to besiege illegal logging. Through World Customs Organization (WCO), APEC, Asia-Europe confrontation (ASEM) and Association of Southeast Asian Nation (ASEAN) for example, illegal timber trade issues has been raised (Scheyvens and Casero, 2010). In bilateral level, Indonesia has arranged and signed a itemise of Memorandum of Understanding (MoU), such as United of Kingdom-Indonesia MoU and United of States-Indonesia MoU and to tackle illegal timber trade including vario us forms of Customs collaboration (Scheyvens and Casero, 2010).Cantham fireside in Goncalves et al. (2012) reported that in 2008, illegal logging has declined, but it facilitate contributed around 40 to 55 per cent of all logging in Indonesia. Amacher et.al (2012) stated that the major obstacle in combating illegal logging is bribery and corruptness of government officials. Further, Nelleman (2012) described that illegal logging syndicates might earnings export fees on the timber, but they pay little tax from the actual logging through initial under-reporting. Transparency International (2011, p.3) pointed out that a good deal corruption and fraud have been used to falsify valuable permits from the Convention on International Trade in Endangered Species of Wild savage and Flora (CITES).Combating corruption across government agencies might become a big task. However, there is one small step to curb corruption building the capacity of Customs. Transparency International (2011) pointed out that the improvement of Customs capacity will assist Customs officials to deal with any tortuous forms of fraud and corruption in the timber trade. Scheyvens and Casero (2010) stated that strengthening Customs integrity is necessary to combat corruption within Customs administrations. In general, there are ten elements of Customs integrity program under The Revised of Arusha Declaration, including transparency, automation, reform and modernization, audit and investigation, and relationship with the private sectors (McLinden, 2005). The implementation of these ten elements would be beneficial to curb corruption.ConclusionThe role of Customs agency might be varied within countries. As the world is fair borderless, the role of Customs agency in Indonesia has become more difficult from revenue collector to trade facilitator and community protector. Carrying out its role as trade facilitator, Indonesian Customs has simplified, harmonized, and modernized its systems and pro cedures on customs clearance for both, exports and imports. The implementation of INSW aims to accelerate the customs clearance, reduce transaction costs and nurture national competitiveness. However, in the future, INSW needs to be improved to accommodate much more traders.Indonesian Customs has simultaneously made some efforts to combat the existence of illegal activities, particularly illegal logging. In response to this issue, Indonesia Customs has engaged in a number of international organizations as well as bilateral and multilateral agreement. As a result, the number of illegal logging has fallen, but it still has become an issue to be solved. unmatched of the challenges is corruption issue within government agencies, including Customs agency. Thus, strengthening Customs integrity is becoming a crucial task as it is moving toward to 2020.