Indonesia’s Finance Minister Purbaya Yudhi Sadewa is weighing a drastic measure: the potential freezing of the Directorate General of Customs and Excise (DJBC). This consideration stems from an urgent need to enhance oversight and improve customs services through comprehensive internal reforms within the institution.
The decision is driven by a series of persistent issues plaguing the DJBC, including allegations of under-invoicing transaction manipulation and the rampant entry of illegal goods. Speaking at the Merdeka Palace in Jakarta on Thursday (November 27), Purbaya elaborated, “There is under-invoicing of exports with declared values lower than actuals. There are also illegal goods entering the country undetected.”
Furthermore, internal investigations have unearthed significant discrepancies in trade data between Indonesia, China, and Singapore. These probes indicate a prevalent practice where goods originating from China are first routed through Singapore before ultimately entering Indonesia. This indirect route leads to China’s export data to Indonesia not always appearing directly, as a significant portion is initially recorded as exports to Singapore.
This intricate transit system often makes China’s direct export data to Indonesia appear anomalous. However, when China’s export data to Singapore is combined with Singapore’s re-export records to Indonesia, the cumulative figure closely aligns with Indonesia’s own import data. “This appears to be the situation unfolding, and we will thoroughly investigate all types of exports to determine if this pattern holds true, or if there is indeed tax evasion,” stated Purbaya, who is also the former Head of the Deposit Insurance Agency (LPS) Board of Commissioners, acknowledging that these investigations are currently being conducted manually.
To accelerate and enhance the accuracy of these crucial examinations, Minister Purbaya emphasized that the ministry intends to integrate artificial intelligence (AI) into its operational processes in the near future. This technological leap is expected to significantly streamline complex data analysis.
Regarding the plan to potentially freeze the DJBC, the Finance Ministry will draw lessons from the policy management model of the New Order era. During that period, the government had temporarily transferred customs functions to the Swiss-based company, Société Générale de Surveillance (SGS). However, Purbaya emphatically clarified that the government has no intention of outsourcing customs operations to external parties. He remains optimistic that the government can effectively manage Customs and Excise functions internally, provided significant improvements are implemented.
“I have issued a strong warning to my colleagues and staff at Customs and Excise, and they have shown immense enthusiasm to collaborate on these necessary improvements,” Purbaya affirmed. He has given the DJBC a strict one-year deadline to rectify its internal issues. “These problems must be addressed with utmost seriousness. I conveyed to them that I have requested a one-year window from President Prabowo Subianto to allow me to comprehensively reorganize and reform Customs and Excise without interruption.”
Summary
Indonesia’s Finance Minister Purbaya Yudhi Sadewa is considering a potential freezing of the Directorate General of Customs and Excise (DJBC) to enhance oversight and facilitate comprehensive internal reforms. This stems from persistent issues such as alleged under-invoicing, rampant illegal goods entry, and significant discrepancies in trade data. Investigations suggest goods from China are often routed via Singapore before reaching Indonesia, leading to anomalous direct export figures and potential tax evasion.
To address these challenges, the ministry intends to integrate artificial intelligence (AI) for faster and more accurate data analysis. While drawing lessons from past customs management policies, Minister Purbaya clarified that the government has no intention of outsourcing DJBC functions, aiming for internal improvements instead. He has given the DJBC a strict one-year deadline to rectify its internal issues, with approval from President Prabowo Subianto for this reorganization period.
