I refer to an article titled "Batam to scrap taxes on luxury items in free trade zones," (The Jakarta Post, Dec. 4, 2008).

Finally, Indonesia has got it - making Batam, Bintan and Karimun Islands tax free for luxury goods like cars, electronics, tobacco and alcohol.

This change is a warning for Malaysia and Singapore that their tourism industry will be significantly affected by the policy in Batam, because people will choose to holiday in a place with better tours and cheaper prices. In short, why holiday in Singapore when Batam is so easily accessible?

Kudos to Minister of Trade Mari Pangestu who, with her team, will see her neighbors' currencies flow in and generate a variety of spin-offs for the islands.

However, if one visits the duty-free shops in Batam's ferry terminals, one notices the glaring fact that nothing has changed. Liquor sold across the counter seems to be the same, or in some cases more expensive, than that in Singapore.

One shopkeeper remarked that the Ministry's notification had not reached them and the other said that there had been an apparent increase in liquor prices!

The question is: Didn't the local authorities in Batam and Karimun Islands check to see if the law as legislated was implemented, so why is there profiteering still going on to tarnish the image of the free trade zone?

Sonny Loo

Batam, Riau Islands

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