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Jakarta Post

Fake products cost RI Rp 43.2t in lost taxes

Layers of counterfeiters: Even knockoffs have their own social classes as different quality of fake products are sold at different areas of ManggaDua

The Jakarta Post
Jakarta
Fri, November 4, 2011

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Fake products cost RI Rp 43.2t in lost taxes

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span class="inline inline-left">Layers of counterfeiters: Even knockoffs have their own social classes as different quality of fake products are sold at different areas of ManggaDua.(JP)For Lexi Wulandani, counterfeit luxury bags satisfy her appetite for fashion despite their poor quality.

“A Rp 350,000 [US$39.2] Balenciaga fake bag purchased from online shops or any bazaar at a mall is enough for me. The bag looks good and it is similar to the original,” the 25-year-old employee of a private company in South Jakarta told The Jakarta Post on Thursday.

Despite her passion for the Spanish-produced bags, she could not afford to buy an original Balenciaga, which cost from Rp 12 million to Rp 20 million.

Lexi claimed to have several counterfeit bags, which she said she needed to support her looks at the office.

For Nabil Muhammad, a student at the Bandung Institute of Technology (ITB), purchasing fake pairs of Nike and Supra shoes was a cheaper than buying the originals.

“However, the quality is far different from the original ones. Within five months they are broken,” he told the Post.

Nabil bought a pair of Nike shoes for only Rp 130,000 and a pair of Supras for Rp 250,000, while the cost of original shoes could easily top Rp 1 million.

A recent research report released by the Economy and Community Investigative Institute at Indonesia’s School of Economics (LPEM-FEUI) found that Indonesia lost up to Rp 43.2 trillion in indirect tax income from counterfeit product sales in 2010.

“There is a strong demand for counterfeit products from society and the market supplies it. The demand and the supply meet, thus counterfeit products can be found anywhere, including shopping malls,” LPEM-FEUI researcher Eugenia Mardanugraha said.

Eugenia said the research was conducted by looking at several different kinds of products, including non-alcoholic drinks, cigarettes, leather products, clothing, pesticides, pharmaceuticals, cosmetics, automotive and oil products, software, office stationery, electronics, lamps and automotive spare parts.

Researchers interviewed 500 people in Jakarta and Surabaya, East Java, between June and October.

Leather products were most frequently counterfeited, with fake goods comprising 35.7 percent of all leather products sold by Indonesian stores and online shops, according to the report.

Software was second at 34.1 percent, followed by clothing at 30.2 percent and automotive spare parts at 16.8 percent.

The institute also found 16.4 percent of lamps, 13.7 percent of electronic goods, 11.5 percent of cigarettes, 8.9 percent of drinks, 7.7 percent of pesticides, 7 percent of oil products, 6.4 percent of cosmetics and 3.5 percent of pharmaceuticals were fake.

Widyaretna Buenastuti, the chairwoman of the Indonesian Anti-Counterfeiting Society (MIAP)called on Indonesians to buy original products because buying fake products would hurt the business, consumers and the nation.

“We have to educate the people in order to curb the number of counterfeit products in Indonesia. We are collaborating with our members and the intellectual property rights [HKI] division of the Law and Human Rights Ministry,” she said.

MIAP’s members include, among others, Pfizer Indonesia, EPSON Indonesia, Unilever, Nestlé Indonesia, Louis Vuitton, Moët Hennessey and British Petroleum.

HKI division investigations chief Fathlurachman said the division was planning to increase its budget to help raid malls, shops and illegal factories across the country in 2012 in order to confiscate more counterfeit products.

“We are going propose between Rp 2 billion [$224,000] and Rp 3 billion for raids in 2012,” he said.

Fathlurachman said that this year’s budget of Rp 750 million was not enough to raid malls and factories. (nfo)

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