JAKARTA,Indonesia—The increasing growth in Indonesia’s cellular communications has attracted a new government tax scheme for imported material used in cellular infrastructure as additional income for the Indonesian government. Under this scheme, all cellular operators must pay a 20-percent “exclusive tax” for any imported materials used in their networks.
Rudiantara, head of the country’s Cellular Association, said imported materials represent 80 percent of the total investments in network equipment. The tax will cost operators US$16 million this year, during which the country’s cellular operators will spend up to US$100 million for network equipment. In addition, he said this new rule will burden operators that must increase pricing plans. He added that customers have objected to expensive pricing plans.
For this reason, some operators have signed agreements for sharing tower infrastructure, including mostly local components, to decrease spending on network buildout and prevent further increases in pricing plans.
