The Trade Ministry plans to introduce an alternative B2B sales and purchase of sugar by auction, but many big firms have raised their objections, asking that the government stick to the old, direct B2B transactions between F&B producers and sugar refineries.

The government initially planned to start the auction in October, but has delayed it due to rising objections. The delay means companies can opt for the old B2B format, but they still have to report their sugar purchase volume and value to the ministry.

“Those who don’t want the auction and resist reporting their sugar purchase don’t want the tax office to know their production size and the actual amount of tax they should pay,” Enggar told reporters on Thursday.

“If they intend to play hanky-panky with the tax body, they will apparently be resistant, and for those who are resistant, it’s time for us to check their tax compliance,” he added.

Earlier, the Association of Indonesian Soft Drink Producers (Asrim) stated that an auction would increase production costs by up to 22.5 per cent, because of the lengthier supply chain through the auction market.

However, the minister stressed that the reason for introducing the auction was to create transparency and to provide small and medium F&B producers with fair sugar prices.