News - 14 September 2018

Higher consumer goods import tax effective today

Antara/Aji Styawan

The higher import tax on consumer goods is effective as of Sept. 13 as part of the government's efforts to slow imports and improve its current account.

Under a recently issued finance ministry regulation, the government has imposed a 10 percent on consumer goods range from cosmetics to household appliances, to clothes, hobby equipment, electronics, automotive products and to food and beverages.

The new import policy affects 1,147 consumer goods.

Ambang Priyonggo, the head of international customs and inter-institutional excise/customs at the Finance Ministry,  said on Wednesday as quoted by kontan.co.id that the new tax would come into effect at 12:01 a.m. on Thursday at all airports, seaports and other entry points across the country.

The new regulation, which replaces Ministerial Regulation No. 34/2017 next week, imposes an increased import tax of 10 percent from the previous 2.5 percent tax on personal care products like shampoo, soap and cosmetics, along with 215 other consumer goods.

The regulation also increases the import tax from 7.5 to 10 percent on 210 other goods, including luxury cars. A 7.5 percent import tax, increased from the previous 2.5 percent, is imposed on 719 other imported goods and products, including audio speakers and swimwear.

The new regulation maintains a 2.5 percent tax on 57 imported goods that have been deemed essential to supporting domestic industries.

The ministry’s customs and excise directorate general recorded in August a 16.46 percent year-on-year (yoy) increase in imported consumer goods to $15.77 billion. 

The move is part of a concerted effort to reduce the swollen current account deficit, which has been deemed one of the major triggers of the negative market sentiment that has contributed to the steep rupiah depreciation. (bbn)

Source: The Jakarta Post