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Besides Thrifting Issues, Textile Industry Criticizes Bank Interest

BULETIN TEKSTIL.COM/ Jakarta – The Bali district committee of Indonesia Textile Association (API) requested assistance including a reduction in the bank’s interest rate. This request for assistance was made in order to improve competitiveness in dealing with used clothing imports.

The import of used clothes disrupts the local market,” stated Dolly Suthajaya, Chair of Bali district committee of API, in Denpasar.

He expects that the bank lending rate for the textile business will be decreased to six percent, down from the current rate of roughly 11-12 percent. He repeated that the bank interest rate is one of the components of the Cost of Production (HPP), aside from raw materials, labor, and other operations such as electricity and transportation.

He described the textile sector as a labor-intensive industry that employs a big number of people, is export-oriented, and encourages creativity. “There are concerns that it will put a stop to the creation and production of full-used clothes on the market, as well as kill the creative industry in Bali,” he added.

The association has 60 members in Bali, some of which are small-scale business. On the other hand, he claims that textile entrepreneurs fulfill their tax requirements, including paying import duties for textile-supporting raw materials at high tariffs of roughly 32% of the overall value of items.

Not to mention the costs of warehouse rent and the quarantine requirement. Meanwhile, imports of secondhand clothing have little value and contribute no income to the country, particularly in terms of taxes and customs when they are imported into Indonesia, according to Dolly.

The stealth economy is not clear about the import tax, it must be eradicated or subject to high taxes so that all contribute taxes,” he said.

Indeed, he stated that a number of countries do not allow secondhand clothing imports due to environmental concerns. As a result, even when they sell at low or far below the HPP, actors in the secondhand clothing market benefit.

On the other hand, the issue of competitiveness implies that some textile items in the country have yet to dominate a number of shopping centers, due to competition from Vietnam, China, and Bangladesh. “Hopefully, in the future, we will be successful in eliminating the import of secondhand clothes, so that the textile and textile product industry in Bali will rise again and be enthusiastic about being creative,” he remarked once more.

Meanwhile, one of The People’s Representative Council of the Republic of Indonesia (DPR RI) member Intan Fauzi emphasized that the import of used clothes must be investigated thoroughly, especially in terms of the permits that have been granted in the last five. Companies that have been active in facilitating the import of used clothes also need to be investigated.

If later indications of violations are found, individuals involved in the import of used clothing must be penalized because they have destroyed the domestic textile industry and textile products,” said Intan.

According to her, the surge in secondhand clothing imports has had a significant influence on the textile industry and textile products. Used clothing imports are also contrary to President Joko Widodo’s policy orientation, which consistently encourages an increase in the usage of Domestic Component Level (TKDN).

According to Intan, secondhand clothing imports reached 320,000 tons. If this quantity is produced domestically, it will impact other economic activity. Energy, finance, logistics, supporting industries, and other connected sectors are all affected. Furthermore, it will generate approximately IDR 6 trillion in tax revenue for the government.

The member of Commission VI of the DPR RI, who is a partner of the Ministry of Trade, stated that the import of used clothing violates Minister of Trade Regulation (Permendag) No. 51/M-DAG/PER/7/2015 of 2015 concerning the Prohibition of Import of Used Clothing and Permendag No. 12/M-DAG/PER/2/2020 of 2020 concerning Prohibited Import Goods.

Then the Permendag No. 18 of 2021 concerning Export Prohibited Goods and Import Prohibited Goods and Permendag No. 40 of 2022 concerning Amendments to Permendag No. 18 of 2021.

The control of used clothes must be done quickly. Law enforcement officials investigate from the perspective of permits and companies that import used clothing. Discipline in the field is no less important. Both in markets, malls, online and open sales centers,” she said.

In a meeting with Commission VI of the DPR RI, the Minister of Trade, Zulkifli Hasan, stated that he would destroy of imported used apparel worth IDR 20 billion that was successfully seized in Riau. Destruction valued at IDR 10 billion was also carried out in Mojokerto, East Java.

According to him, in the future control of secondhand clothing can be carried out through regulations related to Indonesian language labels, Permendag No. 25 of 2021. Then Mandatory Indonesian National Standard (SNI) for Clothing as regulated in Minister of Industry Regulation Number 7 of 2014.

Until now, fraudulent importer producers have received very large import permits that are not in accordance with their legal designation. In fact, imported items should be used just for raw materials and should not be traded or transferred,” he explained.

There are many fraudulent companies that only have Industrial Business Permit (IUI) but no machines or manufacturing capacity. Some illegal producers use imported goods as raw materials, while others sell them. This is extremely worrying,” he concluded.

(Red B-Teks/Ly)

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